Writing off losses against tax

piratematt

Forgive me if I've gotten the wrong end of the stick.

I've recently become a 40% tax payer.
So my 5% savings income from current accounts will have to be declared this year and I will have to pay 20% back

Given I can calculate fairly accurately how much tax I will owe on my savings...

Is it not an entirely stupid idea buy some high risk volatile shares to the tune of this amount (or a touch more) outside an stocks and shares isa. (I can raise this without a real problem)

If they increase in price I sell them. I won't exceed my cgt allowance by any means (unless they increase in prices beyond recognition)

I win. I still pay my owed additional tax on my savings, but I've made a high gain on my volatile shares.

If they fall in price dramatically I sell them.

I write off that loss against my tax owed.
So I've only lost money inside what I would have owed anyway.

The worst outcome is the same as doing nothing and paying my tax back?
Of course the safest option would be to simply put the extra 'tax owed' money in another 5% savings account, but the return would be negligible.

Or can you not write off tax with losses like this?

Apodemus

As far as I am aware you can only write off capital losses against capital gains under CGT, not against income under income tax.

colsten

If you are only just into the 40% range, you might be able to get back into the 20% range by increasing your pension contribution.

piratematt

No. I'm significantly in the 40%

I could pay all into a pension but the whole reason for moving jobs (and extra stress) was to significantly pay our way out of NRAM mortgage black hole as quickly as possible.

piratematt

But thinking it through I can see the flaw of my logic.
If you could do this, everybody at 40% would be compulsive gamblers