CGT question

[Deleted User]

It depends when the 41000 losses were incurred.


If they were incurred PRIOR to 2020/21. 

2020/21 Gains 8000 covered by annual allowance 8000. 4300 wasted.Loss carried forward to 2021/22 is 41000.


If they were incurred DURING 2020/21.

2020/21 - Gains 8000 less losses 8000 (33000 to be carried forward to 2021/22). Annual allowance of 12300 wasted entirely.

Jeremy535897

aaaaancly said:

[Deleted User] said:

Having received-read your post, you may have made an error. Did you make 8000 gains and 41000 losses in 2020/21? If so, you have only 33000 loss to carry forward, not 41000. 

I have £41000 CGT losses from stocks and shares which I believe I can use any time (doesn't have to be the same year) to offset  gains.

I also have used £8000 of my £12000 allowance this year. Leaving £4000....but I think that was 20/21. If I sell this year I will have £12000 allowance yes?

sorry for the confusion and misinformation. I haven't thought about CGT until I wondered whether I should sell this flat or not, plus I'm not very clued up nor do I have a good business mind. 

This forum is great for getting an idea of my options. Thanks for all the replies.

The annual exemption is £12,300, not £12,000, for 2020/21 and 2021/22. If your £41,000 loss arose in 2020/21, you have used £8,000 of it against your gains, and you have not used your 2020/21 annual exemption. That is because, if they arise in the same year, losses reduce gains before the annual exemption. However, you can reduce current year gains by the annual exemption before using losses brought forward.

aaaaancly

[Deleted User] said:

It depends when the 41000 losses were incurred.

If they were incurred PRIOR to 2020/21. 

2020/21 Gains 8000 covered by annual allowance 8000. 4300 wasted.Loss carried forward to 2021/22 is 41000.


If they were incurred DURING 2020/21.

2020/21 - Gains 8000 less losses 8000 (33000 to be carried forward to 2021/22). Annual allowance of 12300 wasted entirely.

Hmmm... definitely out of my depth here.

[Deleted User]

aaaaancly said:

[Deleted User] said:

It depends when the 41000 losses were incurred.

If they were incurred PRIOR to 2020/21. 

2020/21 Gains 8000 covered by annual allowance 8000. 4300 wasted.Loss carried forward to 2021/22 is 41000.


If they were incurred DURING 2020/21.

2020/21 - Gains 8000 less losses 8000 (33000 to be carried forward to 2021/22). Annual allowance of 12300 wasted entirely.

Hmmm... definitely out of my depth here.

Put simply - when did you incur losses of 41000? ALL prior to 6th April 2020? ALL since then? Or a mixture of the two?

aaaaancly

[Deleted User] said:

aaaaancly said:

[Deleted User] said:

It depends when the 41000 losses were incurred.

If they were incurred PRIOR to 2020/21. 

2020/21 Gains 8000 covered by annual allowance 8000. 4300 wasted.Loss carried forward to 2021/22 is 41000.


If they were incurred DURING 2020/21.

2020/21 - Gains 8000 less losses 8000 (33000 to be carried forward to 2021/22). Annual allowance of 12300 wasted entirely.

Hmmm... definitely out of my depth here.

Put simply - when did you incur losses of 41000? ALL prior to 6th April 2020? ALL since then? Or a mixture of the two?

All £41000 losses were in the year 19/20

This year 21/22 I have not used any of my CGT allowance.

[Deleted User]

OK. 

The position for 2020/21 is as follows:

Gains 8000 covered by annual allowance 8000. The remaining 
allowance is wasted.

The losses of 41000 for earlier years are fully carried forward to 2021/22. 

So, from my original post, your gain is 167796, you can deduct losses of 41000 making the gain 126796. Taking off the annual exemption of 12300 leaves 114496 chargeable. The maximum payable would be 114496 @28% which is 32058.

Gain must be reported and tax paid within 30 days of completion. You can also deduct buying and purchasing fees plus the cost of any improvements to the property.

aaaaancly

Thank you.

You say the remaining allowance is 'wasted' for 20/21. Should the aim be to use it fully each year?

[Deleted User]

aaaaancly said:

Thank you.

You say the remaining allowance is 'wasted' for 20/21. Should the aim be to use it fully each year?

Of course - just like the ordinary personal allowance. Our posts may have crossed.

MX5huggy

The CGT must be paid in 30 days. Can the figure be revised later? (Say when you do your self assessment?) Because the amount you pay depends on your salary in that year.

[Deleted User]

MX5huggy said:

The CGT must be paid in 30 days. Can the figure be revised later? (Say when you do your self assessment?) Because the amount you pay depends on your salary in that year.

Yep. I haven’t completed this under the new system but it seems fairly clear that credit is given for the tax paid in the online equivalent of box 10 below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/974132/SA108_English_Form_2021.pdf