Reporting Capital Gain and Loss

Angie_B

I am hoping someone could check my understanding of CGT reporting.  I am a standard full time PAYE employment and do not typically fill out a self assessment.  Each year, I sell my investments up to the allowable CGT threshold and check that I am not 4x the allowance and then go on my way with re-balancing and bed&isa.  I have all my records, but do not have to formally report. 

This year, I would like to realise a bit of a loss, to clear up a poorly performing fund and re-buy into my usual global equity fund (I am late 30s, not expecting to require the money for a good while and quite happy with my mix of HSBC global dynamic / balanced and VLS 80).  I have read the HMRC website but I am bit confused re reporting a loss. 

For example, if I were to sell the poor performing fund and realise a £5k loss, I believe I can then sell a better performing fund to realise a £11k gain, which would give me a total of £6k of gains, which is in line with this year's threshold.  

My question is, do I need to report this?  If so, what and how do I report this? 

masonic

You don't need to report if your overall capital gains are below the annual exempt amount and you have not made total proceeds in excess of £50k.

ColdIron

Angie_B said:

For example, if I were to sell the poor performing fund and realise a £5k loss, I believe I can then sell a better performing fund to realise a £11k gain, which would give me a total of £6k of gains, which is in line with this year's threshold.

That's right, you must aggregate all your gains and losses for the year

My question is, do I need to report this?  If so, what and how do I report this?

Not if your gain is within the exempt amount, though do your sums carefully if you are pushing the boundaries

If you had realised a net loss many people would report it so as to offset gains in future years but this isn't you

Angie_B

Thanks both.  I have my spreadsheet set up and I keep it up to date with a rolling sum for working out capital gain (and losses) etc for each fund I own.  I always leave a little leeway when selling for CGT to makes sure I do not exceed the threshold allowance, so that should be okay.  

And if I do not have to report anything, providing the overall gains are within the threshold, then happy days!  I really appreciate the help. 

Anx

You need to report if the total proceeds exceed x4 your allowance: 4x6k 24k

I believe there are new rules putting the reporting threshold to £50k but the .gov website hasn’t been updated with this new amount r, it references the old 4 x allowance. 

I don’t known  if the £50k limit has been abandoned. Someone on the HMRC help forum asked the  same question and was told the new limit was £50k, but there was no response when he pointed out the contradiction on the gov.uk website. The HMRC handbook also doesn’t have the threshold at £50k, it’s 4x allowance 

eskbanker

Anx said:

You need to report if the total proceeds exceed x4 your allowance: 4x6k 24k

Only if already self-assessing (unlike OP):

You still need to report your gains in your tax return if both of the following apply:

• the total amount you sold the assets for was more than 4 times your allowance
• you’re registered for Self Assessment

https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

ColdIron

Anx said:

Someone on the HMRC help forum asked the  same question and was told the new limit was £50k, but there was no response when he pointed out the contradiction on the gov.uk website

There was a response but it only restated the thresholds, and not the query asking if the website would be rectified

https://community.hmrc.gov.uk/customerforums/cgt/0996c23c-e76c-ee11-a81c-0022481b78d4

EthicsGradient

The reporting limit is £50,000, not four times the exempt amount - see Finance Act 2023 (legislation.gov.uk)

peter021072

If you had realised a net loss many people would report it so as to offset gains in future years

Would not reporting a loss mean that you would lose the offset permanently?   My understanding is that losses from 4 years previously can be used, even if not formally reported in that tax year.

eskbanker

peter021072 said:

If you had realised a net loss many people would report it so as to offset gains in future years

Would not reporting a loss mean that you would lose the offset permanently?   My understanding is that losses from 4 years previously can be used, even if not formally reported in that tax year.

Not quite - any loss from a previous year can be used only if reported, but they can be reported for up to four years after the event.

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

ColdIron

This might help

• If your 22/23 gain is covered by the annual exempt allowance, you do not need to record it in a tax return, unless the value of the assets disposed of exceed £49200.  
• You have 4 years from the end of the year that a loss arises, to claim losses.  Leave it any longer and it will be too late to claim.  
• The losses can be carried forward indefinitely and then set against a future gain.  Losses can only be claimed via a tax return or in writing with a supporting calculation.

https://community.hmrc.gov.uk/customerforums/cgt/35ea1a69-6cbc-ed11-9ac4-00155d9771aa