Losses on investments in shares

aj1soad

Over the past 12 months I've started investing in stocks using trading 212. So far ive only invested £12000 and up till november I was in profit but not by much. Most of my investments are in higher risk US tech stocks which has been hit hard recently and now I'm down £3700. I've made some bad choices in some of the stocks and was wondering if I sold them now would I be able to claim back some of these losses againt my income of £25000?

Thrugelmir

Unfortunately not against income. You will be able to offset the lossess against realised capital gains both in the current year and future years.  You'll need to inform the HMRC at the end of the tax year. 

dunstonh

Most of my investments are in higher risk US tech stocks which has been hit hard recently 

Not unsurprising really considering the previous year's gains.

I've made some bad choices in some of the stocks and was wondering if I sold them now would I be able to claim back some of these losses againt my income of £25000?

Yes, you have made some newbie errors.     You are not alone and you shouldn't let it put you off investing.  Just do it in a more conventional better way in future.   And as already answered above, no you cannot.

aj1soad

thanks for the replys

canaldumidi

As explained, you can't claim against income tax (as gains/losses in investments is not 'income').

But you can offset against this or future years' liabilities for Capital Gains Tax.

For the future the simplest rule to follow is not to put all your eggs in one basket.

There are many other potential 'rules', or advice on where to invest, depending on your attitude to risk, assessment of markets etc etc, and whole books are devoted to the subject, but the rule above is a good starting point!

bostonerimus

You can use your capital losses to offset other capital gains, but you get a generous capital gains allowance of £12.3k anyway. The bigger question is are you going to change the way you are "investing" and what lessons you will take away from your experiences?

london21

Might be worth trying low risk index funds than individual shares. 

maxsteam

aj1soad said:

 I've made some bad choices

Well done. It is creditable that you are willing to admit to making mistakes. All investors make mistakes. Some people learn from their mistakes but there are also many people who will believe some hype about some dodgy company then, when the price falls, they simply spread the hype further in the hope that, if only they can convince enough people to buy, the price will rise and everyone will be happy.

There are many people who spend a lot more than £3700 before they learn that there is no easy route to riches.

As stated, the loss is a capital loss which could be offset against capital gains but it's unlikely that you will need to worry about capital gains tax unless/until you have a lot more than £12k in investments.

The £3700 has gone and a lesson has been learnt.

Retireby40

You only lose money when you sell the shares. At the moment your shares aren't performing and are worth less than you paid.

However in 12 months the could be worth more. Or less. 

Nobody really invests for 12 months. It's not long enough to ride the waves of uncertainty.

My advice. Log out of the app. Have a look at it in 2-3 years and review your position.

grumiofoundation

london21 said:

Might be worth trying lower risk index funds than individual shares. 

For clarity
index funds shouldn’t really be viewed a low risk - although they are lower risk than individual shares.

MX5huggy

Hold your shares inside an ISA or even a pension then you don’t have to think about tax on your investments at all.