Taking Losses

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most of my investments are within ISA, Pension or RSP wrappers, but i have a couple of holdings in my Trading Account with iii.

i have been fairly successful over the years in buying in & out of individual companies, but the two holdings i have in my Trading Account are well down on what i paid:doh: -i decided a couple of years ago to just hold and see what happens, as their value was (and is) low and therefore not particularly useful to invest elsewhere.

however, if i were to sell these holdings at their current prices would i be able to 'take the loss' and put this on my tax return?:think:
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  • ColdIron
    ColdIron Posts: 9,161 Forumite
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    Any capital loss you suffer can be declared on your self assessment and used to offset future capital gains (Capital Gains Tax). You would need to deduct any dividends you may have received or reinvested when recording the figure. Your capital loss has no bearing on income, interest or dividend tax you may be liable for
  • planteria
    planteria Posts: 5,321 Forumite
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    so a loss on the sale of shares could be carried forwards to reduce tax on a future capital gain, but will not reduce tax on income..
  • ColdIron
    ColdIron Posts: 9,161 Forumite
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    Exactly that
  • planteria
    planteria Posts: 5,321 Forumite
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    that's a shame.. i like the idea of tidying up, and as it happens it links in with my comments in this thread.. http://forums.moneysavingexpert.com/showthread.php?t=4904374&page=88
    in that if i were to sell i could effectively leave my Trading Account empty and therefore pay for my SIPP from my SIPP automatically.
    is the CGT carried forward indefinately?
    i'm not sure when i'm likely to have a CGT liability to offset against:think:.. most of my assets are/will be within PPR/Companies/ISA/Pension.
    while i'm at it, what about a business loss? i am personally owed money and if the debtor were to go under would a loss as a result of that affect income tax, or just CGT too?:think:
  • ColdIron
    ColdIron Posts: 9,161 Forumite
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    edited 3 April 2016 at 1:47PM
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    planteria wrote: »
    in that if i were to sell i could effectively leave my Trading Account empty and therefore pay for my SIPP from my SIPP automatically.
    I use my trading accounts to pay fees for my ISAs on the basis that I want to maximise my tax sheltered assets. HL charge no fee for holding shares so I use part of the dividends from Investment Trusts to pay the ISA fees, works out quite well given the £5,000 tax free dividend threshold. With CSD I just periodically transfer £50 or so
    planteria wrote: »
    is the CGT carried forward indefinately?
    Barring future legislation I believe so
    planteria wrote: »
    i'm not sure when i'm likely to have a CGT liability to offset against:think:..
    Think of it as an insurance policy :)

    Regarding a business loss, that is beyond my knowledge, pass
  • planteria
    planteria Posts: 5,321 Forumite
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    thanks Coldie..
    not sure what i am likely to do which incurs a CGT charge, so i suppose i might as well keep hold of the shares, and see what happens.:cool:
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
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    As I understand it, you have got to use your capital losses to offset your capital gains made in the same tax year. So the only way to get your full capital gains tax allowance of £11,100 this tax year is to either;
    1) only sell your winners to gain £11,100 - (rightly or wrongly thats what I have done, I have maybe an average share of losers, but have never sold any)
    2) or to sell £11,100 worth more winners than losers. - I have been reluctant to do this amount of trading, so I have been left with an unbalanced portfolio, because I have sold on the basis of using up capital gains tax allowance, rather than keeping the portfolio balanced between sectors.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    planteria wrote: »
    most of my investments are within ISA, Pension or RSP wrappers

    What's RSP?
    Free the dunston one next time too.
  • ColdIron
    ColdIron Posts: 9,161 Forumite
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    Indeed you must account for all disposals in any one year, you can't pick and choose which bits to defer. Rather than muddy the waters I stuck to a single sale of a loss

    https://www.gov.uk/capital-gains-tax/losses

    To keep your portfolio balance could you not use Bed and ISA to re-buy? Perhaps re-buy after 30 days or even use an intermediary (Acc instead of Inc maybe) to bridge the gap?
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
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    ColdIron wrote: »
    To keep your portfolio balance could you not use Bed and ISA to re-buy? Perhaps re-buy after 30 days or even use an intermediary (Acc instead of Inc maybe) to bridge the gap?

    Perhaps I should have done it that way. But to complicate matters further, as ETFs have become cheaper I have been selling direct shareholdings to put into them. (because I find I don't have any magic touch in picking shares, I guess I have about made the market average) So now I am left with approx 30% cash based (mostly Fixed rate 4.5% cash ISA with 1 year to run and NSI Index linkers) 60% equity funds, and 10% in 8 poorly balanced shares showing up to 40% capital loss. This year I did as you suggest, selling National Grid (the last of my winners) and some VUSA to reinvest in CSP1 - both S&P 500 ETFS. I am reluctant to sell the remaining shares because if I needed to sell a lot at once (to buy a house) I could use the losses on them do do it without incurring CGT.
    Not saying this is the best way to do things, its just what I have done.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
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