Capital Gearing Share Discussion Threads

[pedr01] 13/5/2016 09:41

Wishing you all the best David.

How do we copy them ?? At the moment I just have a link in my bookmarks to your homepage ???

[investoree] 13/5/2016 09:28

david77 Good luck with your major operation next week and hopefully you will quickly recover and get back to leading a full healthy and productive life. Like you as I become progressively older I am increasingly frustrated by experiencing difficulties adapting to not being able to work as productively (both physically and mentally) as I could 20, 30, 40 or 50 years ago - combined with a near doubling and sometimes trebling of the time taken to accomplish even so called simple chores such as completing my self assessment tax return.

I am extremely grateful for the unstinting assistance, help and support that you Miata and Gengalphus have provided to many of us less knowledgeable on the various tax threads and I wish you all long, prosperous, happy and successful lives long into the future.

[david77] 13/5/2016 08:47

The stonebanks calculator is mine. Thanks M K Hubbert for your kind words. These programs are written in java script and run on your machines. They are self contained.

I am now old and decrepit, and looking forward (??) to major surgery next week, If you use the stonebanks progs, I suggest that you copy them to your own machines.

[m_k_hubbert] 30/4/2016 23:45

I've just used the 2 CGT Calculators when submitting an actual tax return (previously I'd just used them as a trial for a selection of the year's transactions) and thought I'd share my experiences with this board.

Previously I'd used the online calculation forms on the HMRC site but they are not meant to work for partial disposals, are clumsy to use, and for 2015/16 I'd made 28 disposals which is over the HMRC limit of 20 for use of their forms. Once I had the input in the correct (CGTCalculator) format it was a simple process to produce the output; at the same time I used the Stonebanks converter so as to compare results. Results were nearly identical, just £1 difference in disposal proceeds (rounding differences). Stonebanks showed 27 disposals as opposed to 28, difference being it combined same day transactions. I preferred the Stonebanks format and used it for my return but will also be submitting my wife's return within the next few days and will use CGTCalculator output. It will be interesting to find out if HMRC have any queries with either of these formats but, from comments on the 2 active CGT threads, they tend to be accepted. HMRC notes required that attached files are in genuine PDF format - I used Word 2016 to save Stonebanks output in PDF format and hope it will suffice.

I'd long used Stocktrade and their reporting format was limited by modern standards which normally resulted in my having to extract data manually from each contract note. I took the opportunity last summer of switching to HL at the time of Stocktrade's sale to ATS hence exit charges were waived. HL's reporting tools are far superior and I wish I'd swapped brokers earlier. The data downloaded from HL in CSV format is such that no conversion for CGTCalculator is necessary although the 'Charges' and the (optional) 'Tax' field are not present. Initially I used Excel formulae to generate the 2 missing fields using conditional functions to add £1 PTM levy for considerations >£10k and to add tax if HL's downloaded contract note reference commenced with a 'B' (for Buy). HL's commission is flat rate thus process worked once I'd entered the (typical) 11.95, and applied the conditional check for PTM levy and copied to all cells. Only problem was that HL's commission rates reduce for a month following certain levels of trades in the past month; fixed by comparing the downloaded total transaction value with the number of shares x price although it took fairly complex conditional formulae to cover everything. Checked against varying commission rates and is now producing commission values automatically accurate to 5p (rounding differences and HMRC round costs to whole £ anyway).

In summary process now automated to such an extent that I can have the entire year's CGT calulations in PDF format within an hour of downloading data from HL, even with potentially over 100 trades (there were 78 this past year). In my case it's been well worth going to effort of automating spreadsheet as far as possible as I normally prepare CGT returns for myself and 2 relatives. The online calculators, CGTCalculator and Stonebanks, are simply brilliant and my thanks go out to the authors.

A couple of more general comments re HMRC's online process for filing returns. 1) I encountered quite a number of instances where 'i' option (for Help) returned 'Sorry, Help could not be found'. Unfortunately broken Help links applied to several of the CGT questions / input fields which I don't find that straightforward - HMRC should have sorted Help function out before current year's returns went live earlier this month. 2) A new 'Verify' process at login to HMRC / Gov't services has just been introduced and to quote Patrick Hutber, late City Editor of Sunday Telegraph 'Improvement means Deterioration' which is definitely the case as far as many rural dwellers are concerned. The Verify process mainly relies on taxpayer receiving an access code via SMS to pre-registed mobile number at each (!) login which is a big problem where network coverage is poor to non-existent.

[gengulphus] 29/4/2016 11:20

Once a loss has been 'claimed' by telling HMRC about it, it just gets used when the rules say that it is, and carried forward otherwise.

There's a deadline for 'claiming' a loss (4 years after the end of the tax year in which the loss was realised); if you miss that deadline, the loss becomes forever unclaimable and unusable. Except for losses realised in the 1995/1996 tax year or earlier, which can be used without 'claiming' them because they're from before the rules about 'claiming' losses came in, but that will probably be a pretty rare case by now!

But there's no limit on how many years a loss can be carried forward. And there is normally (*) no choice about whether you use losses or not - the rules about offsetting losses basically just operate automatically, with all that needs to be kept track of between one tax year and the next being the total amount of losses carried forward between them. Losses enter into the calculations in the tax year in which they are realised and the calculations determine automatically when they get used, without being affected by any choice the taxpayer makes about the loss other than whether to claim it at all.

Not even choices about when to claim a loss, by the way, because losses enter the process for the tax year in which they were realised, not the tax year in which they were claimed. E.g. if you were to claim a loss now that you realised in the 2012/2013 tax year, which you can do up to the end of the current tax year, you don't automatically get to use it against a gain realised now. Instead, you have to redo the loss-offsetting/forwarding calculations for the 2012/2013 tax year, then if that increases the losses carried forward from 2012/2013 to 2013/2014, redo them for the 2013/14 tax year, then if that increases the losses carried forward from 2013/2014 to 2014/2015, redo them for the 2014/15 tax year, then if that increases the losses carried forward from 2014/2015 to 2015/2016, redo them for the 2015/16 tax year. Finally, if all of that increases the losses carried forward from the 2015/2016 tax year to the current 2016/2017 tax year, you'll be able to realise more gains in the current tax year without needing to pay CGT on them - but there is a bit of a chain of "if"s in that!

So basically, once they've been 'claimed', you carry losses forward until they're used, however long that takes (or until you die, which brings all of your CGT affairs to an end, with any losses still unused at the point of death no longer having any possible use). So in one sense, you can carry losses forward indefinitely - but not in the sense that you can choose to carry losses forward indefinitely.

(*) I say "normally" because there are some unusual circumstances (for example, some cases involving "clogged losses" realised on disposals to "connected people") in which I believe you do get some choice about using losses. But not anything you'll encounter in the normal course of buying and selling investments.

Gengulphus

[sniffer2] 16/4/2016 14:46

Thank you. Last question. How many years can I carry forward losses?

[rangers99] 14/4/2016 09:14

The cgtcalculator.com website now has a "live portfolio" capability. Basically it extracts the current bid price of your stock from yahoo and works out a running total of your capital gain/loss. Note this only works if you are using the stocks' EPIC code eg. GSK for GlaxoSmithKline. Also you have to click the "live portfolio" check box.cheers

[randowiggum] 07/4/2016 17:08

Sorry all, Doug at the CGT Calc website emailed me just now saying showing the tax calc. I forgot about the tiered rate between 18% and 28%. so obviously my blended rate is lower.

Been a while since i had a capital gain calc to do!

[rangers99] 07/4/2016 15:57

randowiggum
Can you post the numbers ie. the tax year and your capital gain so we can check. David is right, the main thing is the actual capital gain, the HMRC will automatically work out your tax due based on a lot of other factors no doubt. CGTCalculator just assumes there is zero income. However it would be good to make sure the value is correct.

[randowiggum] 07/4/2016 15:34

I guess its much the same with the CGT calc, as long as i dont use the tax due i shouldnt have an issue. Up to the calc of the taxable gain i should be fine?

[david77] 07/4/2016 13:03

That's why the stonebanks calculator calculator doesn't try to calculate the tax due, it just calculates gains and losses. It provides the figures you need for the SA108 tax form.

[randowiggum] 07/4/2016 11:33

Hi all,

Do you know if the CGTCalulator website is up to date? I have used it in the past and now i have gains went back to it. But the implied CGT rate it gives me is 24% which is too low for 2015/16 tax year.

I am assuming the way it calculates the taxable gain is right however!

R

[gengulphus] 04/4/2016 11:19

Yes, allowable capital losses on any type of asset can be offset against chargeable capital gains on any other type of asset (or the same type, of course).

There are plenty of restrictions on whether a loss is allowable at all, such as the one that if a loss isn't 'claimed' by telling HMRC about it before a deadline, then it isn't allowable, or that if an asset is exempt from CGT, for instance due to being shares held in an ISA, then losses on it aren't allowable. And there are a few restrictions on offsetting allowable losses that depend on the people or other legal entities involved, e.g. some that can apply when trusts are involved, or the 'clogged loss' rule (which says that if you realise an allowable loss by disposing of an asset to a 'connected person', then that loss can only be offset against gains realised on other disposals to the same 'connected person'). But none that I am aware of that depend directly on the type of asset.

Gengulphus

[sniffer2] 01/4/2016 13:53

Does anyone know if I can offset losses on shares against cgt on property?

[gengulphus] 21/3/2016 12:18

Sorry, it's not as simple as that. The final outcome of the calculations you are expected to do might be equivalent to it, but it's by no means guaranteed and even if it is equivalent, the taxman may well want more information.

Things that can stop it being equivalent include:

* The period across which all this happened being split between more than one tax year - if it is, the question arises of how the overall loss breaks down into gains and losses in the individual tax years.

* You having any shareholdings in any of the shares you traded in any non-tax-sheltered account (not just the account you're talking about) or indeed as certificates, from 30 days before the start of that period to 30 days after its end. If you do, the existence of those holdings and/or of transactions in them may well interact with the calculations of the actual gains and losses.

* You having any other assets that you sold (or otherwise disposed of) and that are not exempt from CGT in the tax year concerned - in particular, gains on those assets might be required to be offset by the losses you incurred by trading (which depending on the various amounts involved, could make it pointless claiming the losses, essential to do so in order to avoid CGT, or various other possibilities). And to be clear, "any other assets" in that means both shares that weren't included in your trading and non-share assets, again regardless of where/how they're held, except that assets held in tax shelters (e.g. ISAs, SIPPs) can be disregarded.

* You receiving any dividends or other income payments in the share dealing account during the period concerned - income payments do not count as capital gains for tax purposes and so any such payments need to be disregarded in establishing what the capital gains and losses are.

* Quite possibly some other things I haven't thought of offhand!

As regards what calculations you're expected to do: you're basically expected to calculate the gain or loss on each sale (or other disposal) of an asset subject to CGT during the tax year concerned. For assets that are neither shares nor share-like securities (in the sense of being able to buy multiples of them that are not distinguishable from each other), that's a straightforward matter of subtracting the amount you received on the sale from the total paid for the asset. For assets that are shares or share-like securities, it's more complex but does simplify down to the same thing provided (a) that it's a sale of the full holding - treating multiple sales on the same day as though they were a single sale of the total number of shares for the total sale proceeds, but not doing that for sales on different days; (b) that if you bought on the same day as you sold, the shares bought were included in the sale - i.e. it doesn't simplify if you sell your full holding in the morning and then buy a new holding in the afternoon; (c) that you don't buy the same type of share in the next 30 days after the sale. The calculation of the gain or loss is liable to get more complicated if any of those isn't the case.

Having calculated all those gains and losses on individual sales, you're then expected to add up all the gains for the tax year, add up all the losses for the tax year, and offset them against each other as far as possible - i.e. down to the originally-smaller one of them being zero and the originally-larger one being the difference of the two original amounts. If that results in some gains remaining, those gains are free of CGT up to the amount of the CGT allowance; any that are in excess of that are either offset by brought-forward losses from earlier tax years (if available) or actually taxed by CGT. If it instead results in some losses remaining (as sounds likely but not certain in your case), you can claim them and carry them forward to later tax years.

Note also that if the original total of the gains before offsetting the losses was over the CGT allowance, you need to claim the losses in order to offset them and avoid having to pay CGT. It's only if that original total of the gains is within the CGT allowance and bigger than the original total of the losses that you've nothing to gain by claiming them - and even then, if you are nevertheless required to complete the capital gains part of a tax return for the year concerned, you need to detail the losses as part of making the tax return complete and correct.

Which brings me on to what information the taxman requires: if he asks you to complete a tax return, you need to follow its instructions about when to complete its capital gains part. They say that you need to do that (specifically, complete its Capital Gains Summary supplementary pages and accompany them with calculations detailing the gains and losses, or the online equivalent) if any of a number of conditions applies. One of those conditions is that you want to claim capital losses or make other CGT claims or elections - so the fact that you want to claim capital losses means that you do have to do so. And some of the details requested by the Capital Gains Summary pages are separate totals of gains and losses (and indeed separated a bit more than that, into quoted shares, unquoted shares and other assets IIRC), so I'm afraid that just an overall loss figure won't be good enough.

If the taxman doesn't ask you to fill in a tax return, you're still subject to the rule that capital losses must be claimed in order to be usable. So you either complete one voluntarily (in which case the last paragraph applies) or you contact the taxman to say that you want to claim the losses. My guess is that the best way to do that is phone, explain that you aren't currently required to fill in a tax return, give a summary of your position (e.g. that you have more capital losses than gains and want to claim the losses so that you can carry their excess over the gains forward to future tax years, or that you have capital gains over the CGT allowance and need to claim your losses in order to bring the gains down to being within the allowance), and ask what they want you to do. It may well be that they decide they want you to complete a tax return, of course, but they may have a simpler alternative... I do suggest making certain you understand your position with regard to both gains and losses first, though: if you seem unclear about it, my guess is that they're more likely to think "we need a tax return to get a proper picture"!

I do realise that if you've traded extensively, there may well be hundreds of individual gain/loss calculations involved... :-( If so, you're not the first person to have encountered that problem - see e.g. the header of the other CGT thread . There is however some good news: the two free CGT calculators around (available from the links in this thread's header) should be able to do most or all of the individual gain/loss calculations for you - you'll need to feed them with a record of your individual trades, but they'll deal with understanding the calculation rules in detail. In particular, they can cope with partial sales and with the rules about multiple trades on the same day or buying 30 or fewer days after a sale.

Their main weakness is that they don't really understand the rules about shareholdings that are affected by corporate actions during the holding period, such as share splits, share consolidations, mergers, demergers, rights issues, etc. It's usually possible to tweak their inputs to end up with getting the correct results out at the end, but that's a bit of an own goal: to be certain that you've tweaked the inputs correctly, you need to know the calculation rules in detail and check that the calculator has done something equivalent to the correct calculation - but the main point of using the calculators is that they save you from doing the correct calculation yourself!

But in the case where the calculators are especially valuable, i.e. processing a large number of individual gains on holdings held for only short periods, it's likely that only a very small proportion of the holding periods involve such corporate actions - and so while the calculators might not save you all the work of calculating individual gains and losses, they'll almost certainly save you the vast majority of it.

You do have to take care to give the calculators sufficient data to allow them to produce the correct answers, and that does require a bit of understanding of the calculation rules. To be on the safe side, to do the calculations for any particular share for a tax year, you should give the calculator details of not just all the transactions in that share during that tax year, but also:

* All transactions in the 30 days following the last sale in the tax year, even if they extend into the next tax year (or just give details of all transactions in the first 30 days of the next tax year regardless - i.e. all transactions up to and including May 5th of the next tax year).

* All transactions before the tax year and after the last time that you went 30 clear days with no holding in the share.

Having given the calculator that extended data, it will calculate gains or losses on any sales it contains that lie outside the tax year you're interested in. Disregard any such gains and losses. It may be that the calculators have facilities to do that for you, but I'm afraid I don't know them in enough detail to know whether they do, and if so, what those facilities are. (That's because I don't use the calculators myself - I think they're excellent if one has lots of short-term trading, but I'm very much a Long Term Buy & Hold investor myself, so that a large proportion of my holdings have corporate actions on them at some stage of types the calculators don't really handle...)

Gengulphus

[daveandlaura] 19/3/2016 16:57

Help..

Please tell me that is it as simple as I deposited x amount to my share dealing account.....i have x amount left which is less due to poor trading (in and out of small caps mainly)so is the difference my loss and can o claim this as a loss?

Most holdings were for trades and only held for short periods.

[gengulphus] 05/2/2016 20:55

A fair amount of experience, but mainly a 'packrat memory' - no guarantee that any particular fact will stick in it, but an awful lot of stuff does!

Gengulphus

[sesame03] 05/2/2016 07:33

Thank you for your detailed response Gengulphus. You must have a vast amount of experience to put something together like that so soon!

[gengulphus] 04/2/2016 11:28

Until and unless you withdraw the shares from the ISA, neither gains nor losses on them count for CGT purposes, so it's completely pointless submitting a negligible value claim for them. If and when you do withdraw them, your gain/loss computation will be based on the value of the shares when you withdraw them from the ISA, as though you had bought them at that price, and a subsequent negligible value claim can only cause you to be treated as having realised a loss from that price (so the most such a subsequent loss can be is the shares' value at the time of withdrawal). The ISA provider will give you their valuation of the shares at that time.

No, that valuation is not necessarily going to be the last closing price: it's supposed to be a fair valuation of the shares at the time of withdrawal, taking into account any known events between the last close and the withdrawal from the ISA. And whatever it is, both you and the taxman can argue that it's wrong - valuation is not an exact science in the absence of firm market prices - and ultimately it's a matter for you and the taxman to settle between you. Having said that, I suspect that if you accept the ISA provider's valuation, so will the taxman unless something actively raises the question of whether it's a good valuation to his attention.

Nothing actually "triggers" a negligible value claim other than your desire to make one. But I imagine you really mean something like "what event would cause a subsequent negligible value claim to stand a reasonable chance of success?"... The answer to that is basically just that the shares must have become of negligible value (i.e. worth nothing or next to nothing) during the ownership period concerned - i.e. from the time that you withdraw them from the ISA until you make the claim. In particular, they must not have had negligible value when you withdrew them from the ISA, and they must have had negligible value by the time you make the claim.

Also, note that you can choose an earlier date on which you are to be treated as having realised the loss than the date you actually make the claim, as long as it is in the same tax year or one of the two preceding tax years, but if you do so, the shares must have had negligible value on that earlier date. (And by the way, choosing an earlier date than the date you actually make the claim is quite normal - e.g. if someone submitted their tax return for 2014/2015 last month with a negligible value claim for a loss they wanted to use in that tax return's CGT computations, the date they would have made the claim is in the 2015/2016 tax year, but the claim would be to realise the loss on a date in the 2014/2015 tax year.)

Judging whether a share has become of negligible value is basically just a specific instance of the general problem of valuing shares, which as I say above is not an exact science in the absence of firm market prices. But I would suggest the following guidelines:

* If there is still a reasonable possibility of a return to shareholders, the shares are not yet of negligible value. It doesn't have to be a high chance - based on what you say about Oxus Gold's appeal, the possibility that success at the appeal will come to shareholders' rescue should be enough to say that the shares are not yet of negligible value - it's a reasonable possibility as things stand. But you don't have to worry about unreasonably unlikely possibilities such as someone doing a routine inspection of a thought-to-be-worthless gold mine happening to kick a rock over and expose an unsuspected rich seam of gold! (There are CGT rules in place about what to do if such an unforeseeable return to shareholders does happen after a negligible value claim has been successfully made - basically, whatever the shareholder gets out of it then counts as pure capital gain - but that situation can only arise after it has been determined that there is no reasonably foreseeable possibility that gives the shareholder a return.)

* On the few occasions I've owned shares in a company that has gone into administration, at some stage during the administration the administrators have written a letter to shareholders saying that they can no longer reasonably expect any return, or words to a similar effect. I believe such a letter is a good indication that a negligible value claim would succeed from then on, provided of course that the claim is made for a date on or after the letter's date.

* I haven't ever needed to do so, but in the absence of such a letter it is of course possible to write a letter to the administrators asking them whether they think there is any realistic prospect of a return to shareholders. Possibly with a brief explanation that you need the information for the purpose of determining whether the shares are of negligible value for tax purposes, but if so, make it clear that you are not asking for tax advice: they won't be allowed to give you that. In particular, don't ask them whether the shares are of negligible value for tax purposes: that's a tax opinion and so is tax advice. But they should be able to answer a question about the reasonably possible outcomes of the administration, leaving you to form your own tax opinion about the value of the shares.

Finally, about the two possibilities you mention:

* De-listing of a company's shares is basically irrelevant to the question of whether they are of negligible value: there are plenty of unlisted companies whose shares are most definitely not of negligible value.

* Dissolution of a company is relevant to negligible value claims, but probably not in the way that you think... It's relevant because there is a requirement that for a negligible value claim to be successful, the claimant must still own the shares when they make the claim (and if the claim is to be treated as realising the loss on an earlier date, also on that earlier date). Dissolution of the company means that its shares cease to exist, and you cannot own non-existent shares! So dissolution of the company results in it immediately ceasing to be possible to make a negligible value claim about its shares.

That's not as harsh as it sounds, because ceasing to own the shares as a result of the dissolution also counts as a disposal of them for CGT purposes - for £0 since you didn't receive anything for them. So that means that you actually realise the loss on the date of dissolution - i.e. as well as no longer being able to make a negligible value claim, you would also no longer need to make one to be able to use the loss: you would just need to claim the loss in precisely the same way as you would claim any normal loss (including the usual 4-years-after-the-end-of-the-tax-year-in-which-realised deadline for doing so).

But you would lose the flexibility about when the loss is realised: while the company was still undissolved, you could make a negligible value claim for it to be treated as realised on any date in up to three tax years, as described above; after it is dissolved, you have no choice - the loss has been realised on the date of dissolution.

Gengulphus

[david77] 04/2/2016 08:02

No tax on gains in an ISA, no tax relief on losses in an ISA.

[sesame03] 03/2/2016 23:02

Hi,

I hold shares in Oxus Gold within an ISA. During December trading was suspended following the conclusion of arbitration in which they were awarded $10m (much less than was claimed). The company intends to appeal the decision however in the meantime administrators have been appointed. Assuming the appeal fails and no money is available to return to shareholders (following payment to legal funders, creditors etc), is it possible I could make a negligible value claim?

I understand that if I request paper share certificates from the broker (Halifax) the shares are automatically withdrawn from the ISA and I am notified of the value on the withdrawal date. Assuming the shares are still listed when I do this the value would be 3.12p (the last closing price).

Also (provided a claim is possible) what event would trigger the negligible value claim? Would I need to wait until the company de-listed or until it was dissolved perhaps? Would a small dividend, say 0.25p invalidate the claim?

Any advice would be greatly appreciated. There is also the hope that the appeal results in an increased payout however it looks doubtful and if I took the shares out of an ISA I understand I would risk a CGT bill.

[ryanwolves] 02/2/2016 23:36

Cheers Gengulphus.As I thought.

[gengulphus] 02/2/2016 23:12

Yes, claiming a loss counts as a claim. So do various other matters, such as negligible value claims: you can pretty safely assume that if HMRC's description of something you could put in your tax return uses the word "claim", it counts as a claim. (And even if that assumption turns out to be wrong in some case that I'm not aware of, you would have a pretty easy defence: you answered the question HMRC asked accurately. Any problem with the answer is due to HMRC not asking their intended question, not to any inaccuracy on your part.)

Gengulphus

[ryanwolves] 01/2/2016 10:53

Thank you david77 and Gengulphus for your prompt and comprehensive reply's.
Most helpful.
Would be grateful if you could take a look at the following question:
i file online.Do i need to answer yes to the question in the CGT section asking whether i wish to make any claims or elections?Not sure if this covers claims for losses or whether it relates to other matters.
Many thanks.

[gengulphus] 01/2/2016 10:07

1)Can CGT losses on shares be offset against income tax?

Not usually. There are some exceptions where they can - e.g. I vaguely recall there are (or maybe were) some among the tax benefits given to EIS (Enterprise Investment Scheme) shares and/or VCTs (Venture Capital Trusts), but I don't remember the details...

So if there is anything 'special' in tax terms about the types of shares involved, it might be worth checking up on the detailed rules. Otherwise, you're pretty safe assuming the answer is "no".

2)Made some gains in the tax year,but these are surpassed by the losses.
Do i offset the gains against my annual CGT allowance first and then reduce my losses by any remaining gain over the annual CGT allowance?

More the latter, but it's a bit of a mixture. Basically, it is:

1) Offset losses realised in the same tax year against the gains. Do that as far as possible. If there are more such losses than gains, the gains can only be reduced to £0 and the remaining losses are carried forward to future tax years.

2) If there are any remaining gains, reduce them by the CGT allowance. Again, they cannot go negative, so if the remaining gains are less than the CGT allowance, reduce them to £0 (and there is nothing you can do with the remaining CGT allowance).

3) If there are still some remaining gains and you have any losses brought forward from previous tax years, use those losses to reduce those remaining gains as far as possible. Again, the gains cannot drop below £0, so either you use up all the brought-forward losses and any remaining gains are taxable, or the remaining gains are reduced to £0 and any remaining brought-forward losses are carried forward again.

(This is often presented in a different order, first offsetting the same-year losses, then offsetting the brought-forward losses but only to the extent (if any) needed to reduce the remaining gains to the CGT allowance, then offsetting the CGT allowance. The two presentations are equivalent - I happen to find the above a bit more memorable.)

Or would it be as follows :
Total gains for year 20,000
Total losses for year (40,000)
Nett loss for year (20,000)

As this is the first time you've realised a net loss for the year, you cannot have any losses brought forward from previous years and so those losses must all be same-year losses (which is implied by your wording anyway). So yes, you offset £20k of the losses against the £20k gains in step 1, leaving £20k of losses to be carried forward into 2016/2017, and steps 2 and 3 don't do anything because there are no remaining gains.

But if for instance you were to realise £25k of gains and £10k of losses in the 2016/2017 tax year, you would then have £25k of gains and £30k of losses available for that tax year, the losses being split as £10k same-year losses, £20k brought-forward losses. In that case, step 1 would reduce the gains to £15k, step 2 would reduce them further to £3.9k (assuming the CGT allowance for 2016/2017 is the same as the £11.1k allowance for 2015/2016), and step 3 would reduce them to £0, leaving £16.1k of the brought-forward losses to be carried forward again into 2017/2018.

3)Had a couple of companies go under this tax year.
How many years after they went bust can i make a negligible value claim on my tax return for the loss?

There's no numerical time limit on making a negligible value claim - but it is limited by the restrictions for making one. Those restrictions include among others:

* You must still own the asset concerned. I.e. you must not have transferred the shares to someone else (not possible on the market, of course, but a private sale or a gift might be possible), and the shares must still actually exist. They cease to exist when the company is dissolved, so at that point you cease to be able to make a negligible value claim - but at the same time you actually realise the loss, and then the normal "4 years after the end of the tax year the loss was realised" deadline applies.

For UK companies that were traded on the main market of the London Stock Exchange, HMRC's negligible value list should tell you whether the company has been dissolved and if so, when - note that it can be many years after the company went bust, as all its affairs need to have been closed out completely before it can be dissolved. But more generally and closer to the "horse's nouth", for all UK companies you can check on whether the company has been dissolved (and if so, when) at Companies House.

* You name a date in the negligible value claim on which you wish the loss to be treated as having been realised. That date must be after the shares became of negligible value, and it must be in the tax year in which you make the claim or one of the preceding two tax years. (For a negligible value claim made in a tax return, it will normally be in the first preceding tax year - e.g. if you make a negligible value claim for a company that went bust in 2015/2016 in your 2015/2016 tax return, which is something you would prepare and submit during the 2016/2017 tax year.)

That basically gives you some flexibility about when you want to bring a negligible value claim into your CGT accounting. That flexibility vanishes when the company is dissolved: at that point, the loss is actually realised (on the date of dissolution) and you can no longer make a negligible value claim - not even one that names a date before it was dissolved.

For something more extensive that I wrote on the subject recently, see .

Gengulphus