Is tax relief possible on Woodford capital losses
Lch
Posts: 1 Newbie
It's likely my husband & I will both lose most of our investments in Woodford equity income fund, we both invested via equity isas a few years ago and transferred in old isas into the fund too. Can we offset the capital loss against employment & rental income on our tax return for this financial year or carry forward the loss to offset against possible capital gains on property in the future? We will not have any significant capital gains this year to offset against. Does the fact we invested via an ISA mean we cannot offset for tax purposes though? Thanks
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Comments
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In exactly the same way that capital gains from investments within ISAs are excluded from CGT liability calculations, losses are also entirely separate, so no, you can't offset capital losses within ISAs against a CGT bill (or any other form of taxation either).0
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As it's inside an ISA you can't offset the capital losses against anything - the tax free status of ISAs cuts both ways.
If they were outside an ISA you would be able to offset them against capital gains (and carry them forward to future years if necessary), but not I believe against income (rental or employment).
It seems a little pessamistic to assume that you will lose 'most' of your money. Even if you bought at the peak there would have to be substantial further falls - something like another 20% - before you were looking at a 50% loss. Of course that's possible if the winding up turns into a firesale of illiquid assets, but it's far from certain.0 -
I think that it will be a long drawn out process with amounts being paid out when funds have been sold. I would have preferred the fund to be taken over. My concern is the amount of cost involved in the selling off of the assets. I also think that the investors should have had a say as to how their investments should have been dealt with.
I only have a small investment in the fund however no one wants to lose money. I am very disillusioned with managed funds with one exception and prefer direct investment. I certainly will not be giving HL any more business.
Nolite te bast--des carborundorum.0 -
Does the fact we invested via an ISA mean we cannot offset for tax purposes though?
Correct, that's the whole point of ISAs, they are a black box from a tax POV, you can't expect to be isolated from capital gains in an ISA but then claim losses, that would be having your cake and eating it,0 -
Regarding the CGT question I am assuming that if the investment is in an ISA via a platform then the funds will be sent to the ISA but what if they are sent by cheque or direct to a bank account thus taking the funds out of the ISA umbrella? Would that create a loss that could be offset?
Nolite te bast--des carborundorum.0 -
Snakes_Belly wrote: »Regarding the CGT question I am assuming that if the investment is in an ISA via a platform then the funds will be sent to the ISA but what if they are sent by cheque or direct to a bank account thus taking the funds out of the ISA umbrella? Would that create a loss that could be offset?
Since I just cant write "no".... no.
p.s. Why would they be sent it outside the ISA anyway as that would be taking the decision out of the investors hands, money they had in an ISA would be removed from it and its tax shelter. They can take it out themselves if they want.0 -
It's likely my husband & I will both lose most of our investments in Woodford equity income fund, we both invested via equity isas a few years ago and transferred in old isas into the fund too. Can we offset the capital loss against employment & rental income on our tax return for this financial year or carry forward the loss to offset against possible capital gains on property in the future? We will not have any significant capital gains this year to offset against. Does the fact we invested via an ISA mean we cannot offset for tax purposes though? Thanks
Ouch!
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I think "most" is somewhat of an exageration at the moment for the majority of investors. You would need to have bought at £1.40, and the winding up take another 10% off the current price to be in less than 50% back territory?0
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AnotherJoe wrote: »Since I just cant write "no".... no.
p.s. Why would they be sent it outside the ISA anyway as that would be taking the decision out of the investors hands, money they had in an ISA would be removed from it and its tax shelter. They can take it out themselves if they want.
I just remember seeing on the email that I was sent that cheques would be sent in some circumstances but that must be for non ISA investments.
Nolite te bast--des carborundorum.0 -
I think that it may be an idea to take a screen shot of the value of the investment at present.
Nolite te bast--des carborundorum.0
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