Can CGT losses be offset against PAYE tax?

Racxie

I I hope the question in the title makes sense.

Essentially I bought some shares a couple of years ago in a GIA (non-ISA), but since then the shares have dropped drastically in value. I finally decided to accept my losses and sold the shares earlier this week at a huge loss.

Now one of my friends is convinced I should be able to use this loss on the stock market against the tax I pay as an employee which seems a bit odd to me. However I'd like to know:

• Is this possible and if so can anyone give me any guidance on how I'd go about this
• Assuming it is possible I'm guessing I'd also need to do it before the 31st January deadline?)
• If it's possible what would be the benefit i.e. would I pay less tax on my regular earnings or would I get some kind of rebate?

I've never needed to fill in a tax return as I've never gained more than £1k in a tax year outside of my regular job, so any help would be much appreciated!

Dazed_and_C0nfused

Is this possible and if so can anyone give me any guidance on how I'd go about this

Did you friend not explain this?  They seem to know what is possible so odd they didn't help you with this aspect 🤔

Assuming it is possible I'm guessing I'd also need to do it before the 31st January deadline?)

Why do you think 31 January is important?  Have HMRC sent you a tax return (or notice to file a tax return)?

If it's possible what would be the benefit i.e. would I pay less tax on my regular earnings or would I get some kind of rebate?

What other "rebate" do you think would be possible?

eskbanker

Racxie said:

Now one of my friends is convinced I should be able to use this loss on the stock market against the tax I pay as an employee which seems a bit odd to me. However I'd like to know:

• Is this possible...
  

To cut to the chase: no, you can't offset CGT losses against income tax.

Edit: (rare) exceptions to this linked below!

Jeremy535897

You can only set losses on shares against income in certain specific circumstances, as explained here:
https://www.gov.uk/government/publications/negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-hs286-self-assessment-he/hs286-negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-2023

Racxie

Dazed_and_C0nfused said:

Is this possible and if so can anyone give me any guidance on how I'd go about this

Did you friend not explain this?  They seem to know what is possible so odd they didn't help you with this aspect 🤔

Assuming it is possible I'm guessing I'd also need to do it before the 31st January deadline?)

Why do you think 31 January is important?  Have HMRC sent you a tax return (or notice to file a tax return)?

If it's possible what would be the benefit i.e. would I pay less tax on my regular earnings or would I get some kind of rebate?

What other "rebate" do you think would be possible?

Nope. He likes to say a lot of stuff and I like to take some of it with a pinch of salt, but it still doesn't hurt to enquire and I know MSE forumites usually have a better understanding of financially related stuff 

I keep seeing articles about 31st January being the deadline for filling in tax returns or ending up with a fine, but I don't know what date-range you need to fill these in for. And no, I've received any request to file anything as I've never made (or lost) enough for it to be a consideration. Though I am aware that if you make over £1k you need to declare it like with the whole eBay fiasco.

As for the 3rd question I'm aware that when buying EIS shares you can get a tax deduction which came come in the form of tax relief on your PAYE income or as a refund via cheque (which was the latter for me once as I filed them over a year or two later than the tax year they were bought in, which I know is ok to do).

Racxie

Jeremy535897 said:

You can only set losses on shares against income in certain specific circumstances, as explained here:
https://www.gov.uk/government/publications/negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-hs286-self-assessment-he/hs286-negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-2023

Thank you! This is the kind of answer I was hoping for. I'll have a read through this over the next couple of days and hopefully it'll answer my question (with positive news). Appreciate it 

Jeremy535897

Racxie said:

Jeremy535897 said:

You can only set losses on shares against income in certain specific circumstances, as explained here:
https://www.gov.uk/government/publications/negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-hs286-self-assessment-he/hs286-negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-2023

Thank you! This is the kind of answer I was hoping for. I'll have a read through this over the next couple of days and hopefully it'll answer my question (with positive news). Appreciate it 

Don't get your hopes up. You have to have subscribed for the shares, for one thing.

Dazed_and_C0nfused

Is a negligible value claim possible where the shades have been sold 🤔

Essentially I bought some shares a couple of years ago in a GIA (non-ISA), but since then the shares have dropped drastically in value. I finally decided to accept my losses and sold the shares earlier this week at a huge loss.

Jeremy535897

Dazed_and_C0nfused said:

Is a negligible value claim possible where the shades have been sold 🤔

Essentially I bought some shares a couple of years ago in a GIA (non-ISA), but since then the shares have dropped drastically in value. I finally decided to accept my losses and sold the shares earlier this week at a huge loss.

No. A negligible value claim is only relevant when you retain the asset.