Capital loss on selling shares - claiming tax relief

intalex

I had some management incentive plan (MIP) equity at a startup which eventually IPO'd, but the value of the MIP equity (also reported to HMRC using form 42) was much higher than the value of the corresponding shares I gained at IPO, and also much higher than the eventual price when selling those shares, thereby realising a capital loss.

I'll be grateful if someone could assist with 3 questions:
1. How long do I have to report this capital loss to HMRC in order to be able to offset it (as a relief) against a potential future capital gain?
2. How would I report it to HMRC in absence of doing self assessment, and what supporting documents would I need to attach?
3. How long do I have to actually be able to offset it (as a relief) against a future capital gain?

Thanks in advance!

Jeremy535897

For 1 and 2, see:
https://www.gov.uk/capital-gains-tax/losses

Once claimed, capital losses may be carried forward indefinitely.

intalex

Once claimed, capital losses may be carried forward indefinitely.

What is the significance of the four-year limit (from realising the capital loss) on the link? Is it just to report/claim the loss or to actually be able to offset it against capital gains? I ask is because I'm not expecting any transactions that could attract capital gains anytime soon.

[Deleted User]

Just to report the loss.

‘You do not have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset.’

intalex

[Deleted User] said:

Just to report the loss.

‘You do not have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset.’

The word "claim" confused me a bit, I thought that meant executing the actual offset against capital gains, whereas now I think what you're suggesting is that it means reporting the loss and getting it logged on my records with HMRC.

[Deleted User]

intalex said:

[Deleted User] said:

Just to report the loss.

‘You do not have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset.’

The word "claim" confused me a bit, I thought that meant executing the actual offset against capital gains, whereas now I think what you're suggesting is that it means reporting the loss and getting it logged on my records with HMRC.

Two steps for losses in tax. 1) claim them 2) Utilise them. 

You are correct.