Share Name Share Symbol Market Type Share ISIN Share Description
Capital Gearing Trust Plc LSE:CGT London Ordinary Share GB0001738615 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 4,310.00p 4,310.00p 4,350.00p 4,310.00p 4,310.00p 4,310.00p 2,533 08:02:45
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 4.7 3.7 51.1 84.3 431

Capital Gearing Share Discussion Threads

Showing 8151 to 8173 of 8275 messages
Chat Pages: 331  330  329  328  327  326  325  324  323  322  321  320  Older
DateSubjectAuthorDiscuss
07/4/2018
17:52
axotyl, having switched brokers to HL a few years ago downloadable data is a great improvement vs previous brokers (Stocktrade, now taken over by Alliance Trust). Having said that HL's data does not supply all the fields needed to complete CGT returns. The solution which works for me was to write formulae for Excel Spreadsheets which effectively 'back calculate' the missing fields, namely allowable costs of acquisition and disposals. Fortunately HL's downloadable date includes the contract note reference which starts with 'B' for purchases and 'S' for sales which enables conditional formulae to handle stamp duty; in absence of these references more manual effort would have been needed on my part. As things now stand, and using CGTCalculator or Stonebanks I'm able to compile an entire years's CGT return in approximately 1 hour.
m_k_hubbert
07/4/2018
08:52
Gengulphus I really appreciate your comprehensive reply. I need to digest slowly, over the next week. What interests me is the way that brokers (well, at least two of them) record our transactions. In theory, they can present all the information required (including charges, tax etc.) in one downloadable spreadsheet. Instead, as I mentioned above, the net sale/purchase details/dates/EPIC are the default record, and one has drill down through each transaction to extract the additional information. As I said, it would take hours to present in the required format. My time is valuable, my accountant's is expensive. So, I'll digest your reply, and out of interest, ask my accountant how they intend to present my tax records to HMRC.
axotyl
03/4/2018
11:26
axotyl, If it's the only solution, I'll go ahead, but I'm really curious to know why tax/charges are needed at all - surely only the net figures are relevant? They are actually at least technically wanted to make your tax return complete and correct. The reason is that you're expected to report your total "disposal proceeds" and your total "allowable costs" for each of the four classes of asset (listed shares, unlisted shares, residential property and other property/assets). "Disposal proceeds" are not the same thing as "Net disposal proceeds", and "allowable costs" are not the same thing as "allowable acquisition costs" - in particular, the incidental costs (charges/tax for a share transaction) of the sale should be taken into account in the allowable costs, not the disposal proceeds. (See page CGN 2 of https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/675146/SA108_notes_2017.pdf - it's not all completely clear there, but the "Allowable costs" section does say explicitly that they include (with my bold) "incidental costs of acquiring or disposing of the asset, such as Stamp Duty or Stamp Duty Land Tax".) In other words, for a simple buy and sell of some shares, what is asked for is: disposal proceeds = (number of shares) * (sale price) allowable costs = (number of shares) * (buy price) + (buy charges/taxes) + (sale charges/taxes) What you're saying is that instead using: net disposal proceeds = (number of shares) * (sale price) - (sale charges/taxes) allowable acquisition costs = (number of shares) * (buy price) + (buy charges/taxes) will result in the same gain/loss being calculated, which it will (up to some small rounding effects - they might differ by £1 or 1p, depending on whether one rounds intermediate results to the nearest pound or penny, which is selectable in CGTcalculator according to http://www.cgtcalculator.com/instructions.htm). So with a similar proviso about rounding, using the net figures will result in the disposal proceeds and allowable costs each being too small by the total incidental costs of the sales, and so the gains/losses being correct. That should have no effect on the tax calculated, but it does affect the correctness of some of the figures one is required to give in the capital gains/losses section of the tax return, and can in rare cases affect whether one has to complete the capital gains/losses section at all (one of the reasons why one might have to is that one's disposal proceeds are over 4 times the CGT allowance, and in borderline cases use of the net disposal proceeds rather than the disposal proceeds might mislead one into thinking one didn't have to). It would be pretty hard for HMRC to make a good case against someone for getting that technicality wrong, especially if they did so unknowingly (so I'm afraid you might regret asking the question and getting this answer!). In particular, I doubt that HMRC would make much of an issue of it, with no tax at stake and (if done unknowingly) a true declaration at the end of the tax return that it is "correct and complete to the best of my knowledge and belief". At the very most, I can't see their reaction if they investigated your return and discovered the issue being more than a slap on the wrist and maybe a somewhat harder look for other bits of carelessness in the information you'd supplied than normal, and I'd be rather surprised if it was even that. As to why CGTcalculator asks for the detailed breakdowns, I suspect it's one or more of (a) using the working sheet on page CGN 9 of https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/675146/SA108_notes_2017.pdf as guidance as to what sort of level of detail HMRC want in CGT computations; (b) wanting to get the "disposal proceeds" and "allowable costs" figures for the capital gains/losses section of the tax return itself fully correct; (c) the likelihood that HMRC will treat encouraging lots of taxpayers to submit technically-incorrect figures somewhat more seriously than an individual taxpayer doing so. Gengulphus
gengulphus
29/3/2018
16:00
I'm about to use CGTCalculator.com for the first time; it looks useful. I had a basic query before I start, with apologies if this has already been asked before (I did try and make contact with CGTCalculator, but haven't received a reply). The majority of my trades are with one broker, and the transactions are listed simply in the format: Date / Code / Name / B/S / Quantity / Net Value / Reference I realise CGTCalculator has to receive data in its required format, though the Conversion advice doesn't cover my broker's format. Question: Surely for both Buys/Sells the net value is all a system needs to calculate the final figures? Why should it need tax / charges details analysed as well? I can dig out the tax / charges for each of my trades, by drilling through my records manually, but for several hundred trades, the prospect is daunting. I double-checked with my broker who confirmed that if I need the tax/charges for each transaction then they do need to be extracted manually by drilling through each of the records. They did ask why, for CGT purposes, I needed that information. If it's the only solution, I'll go ahead, but I'm really curious to know why tax/charges are needed at all - surely only the net figures are relevant?
axotyl
28/3/2018
11:21
bev.shields, However, should it show the losses brought /carried forward, i have a list of results as follows, even with the box ticked to carry forward losses. Am I missing something?:- Yes, I think you probably are missing something. The heading of the "UsePrevLosses" column indicates that it tells you about the brought-forward previous losses used in the year, not the ones that remain unused and being carried forward another year, nor about new losses that get added to the losses being carried forward because there are insufficient same-year gains to offset them. So that column can only indicate a nonzero amount of losses being used for years in which the net capital gains exceed the CGT allowance - and your example doesn't include any such years... If you want to check that out, try adding a fake buy and sell that produce a big gain of say 100,000 in one of the years from 01-02 onwards. You should find that it results in the "CapitalGain" column indicating what it currently does plus 100000, and the "UsePrevLosses" column indicating that the sum of all previous years' losses is used. (That's because the fake gain of £100,000 I'm suggesting is big enough to absorb every loss you've got and any one year's CGT allowance. If you try out smaller fake gains, you should find that only enough previous losses are used to bring the "CapitalGain" figure down to the CGT allowance - assuming there is that amount of previous losses.) What's going on would probably be clearer if the output had a "PrevLosses" column for the amount of previous losses available as well as the "UsePrevLosses" column it does have - but that's basically an enhancement request to be made to the calculator's author. I should probably add that if you do experiment with fake gains, make certain you either do it with a copy of your real data that you throw away afterwards! (Or that you remove the data about the fake trades that produce the fake gains afterwards - but that's a bit more error-prone, specifically to failures to remove data about all of those fake trades...) Gengulphus
gengulphus
27/3/2018
03:18
Hi All, What a great program CGTCalculator. I wish i had found it years ago. However, should it show the losses brought /carried forward, i have a list of results as follows, even with the box ticked to carry forward losses. Am I missing something?:- Results generated from www.cgtcalculator.com SUMMARY INFORMATION Year CapitalGain Exemption UsePrevLosses TaperRelief ChargeableGain Tax* ------------------------------------------------------------------------------------------- 99-00 6253 7100 0 0 0 0 00-01 -8364 7200 0 0 0 0 01-02 -12219 7500 0 0 0 0 02-03 -1545 7700 0 0 0 0 03-04 -2425 7900 0 0 0 0 04-05 -5889 8200 0 0 0 0 05-06 -11108 8500 0 0 0 0 06-07 1793 8800 0 0 0 0
bev.shields
14/3/2018
09:50
Gengulphus - thank you so much for taking the time to provide such a comprehensive post to my original question. Really helpful. I now see that the "trick" (if that is the correct terminology!)is to have my wife's 30 day clock ticking away while I hold the transferred shares and thus reducing the market risk (in terms of being out of the market) to a few days until my sale proceeds are transferred back into her account, ready for a replacement purchase by her. I understand your comments about the fine tuning/timing of utilising my current year and b/fwd losses. Thanks again.
fbrj
12/3/2018
18:44
fbrj, Some years ago I transferred some shares to my wife. These now have quite a considerable unrealised CGT charge attached to them. She has no prior unused losses to offset and in previous tax years has utilised her annual exemption and will do again this tax year (2017-18)on other share transactions. I, on the other hand, have some cgt losses b/fwd and it seems sensible to utilise those by transferring the above shares from my wife to me and for me then to realise the gain (partly using what will be left of my annual exemption and also the balance of b/fwd losses). As I understand it, the transfer from my wife will be done at her S104 "cost" - thereby not triggering a taxable gain for her, as there is none. That "cost" would be used in determining my cgt gain on disposal (to be offset as described above). Basically correct, but not quite right in one important respect. That is that it's not necessarily done at her S104 cost; instead, the transfer is treated as her disposing of the shares and you acquiring them. That disposal by her is treated like any other disposal for CGT purposes, except in one very specific respect: she is treated as disposing of the shares for the total of her allowable costs, whatever that total is. So in particular, her disposal by transferring the shares to you is matched to her acquisitions by the normal rules for CGT - basically, same-day rules, then the 30-day rule, then to the S104 pool - and her allowable costs are determined by what acquisitions that matches it to, and then the disposal is treated as having occurred at the total of those allowable costs. So it will only be her S104 allowable costs if she doesn't acquire the same type of share on the day of the transfer or any of the 30 following days. Whatever it turns out to be, the result is of course that her disposal proceeds are treated as being precisely the same as the total of her allowable costs, and so the disposal is calculated as producing neither a gain nor a loss. So nothing wrong with your conclusion that no taxable gain arises for her - only potentially something wrong with what you say about the transfer being done at her S104 allowable costs. And similarly, your acquisition by the transfer is treated entirely normally by CGT in all respects, except that your allowable costs on the acquisition are treated as the same total of your wife's allowable costs for her disposal by the transfer. In particular, the way you match your disposals to that acquisition is determined by the date you acquired them by transfer, not by the date(s) of your wife's acquisitions. From the taxation of future dividends point of view it makes sense for her to hold these shares again (rather than me). My main question is: if I were to transfer the cash proceeds back to her (ie a couple of days after I have sold them) - would she fall foul of the 30 day rule? In other words, if she were to repurchase within 30 days would her new cost be deemed to be the original transfer value to me or the market price at time of purchase? The timings of you selling, of you transferring cash back to her, and of her repurchasing relative to each other don't matter for the purpose of the 30-day rule, since it is about acquisitions and disposals by the same taxpayer of the same type of non-exempt-from-CGT asset. Sterling cash is an asset that is exempt from CGT, so of those three transactions, only her repurchase is an acquisition of a non-exempt-from-CGT asset, only your sale is a disposal of such an asset, and those two are by different taxpayers. But bring in the transfer from your wife to you as well, and that changes: there is now your acquisition by transfer and disposal by sale to take into account, but the 30-day rule is not a problem for that because the acquisition is before the disposal). And there is also your wife's disposal by transfer and acquisition by repurchase to take into account, and there the 30-day rule is relevant because the acquisition is after the disposal. So you want to ensure that your wife's repurchase happens no earlier than the 31st day after her transfer of the shares to you. There is no longer time this tax year to transfer her shares to you, wait 31 days, then quickly sell, transfer the cash to her and her to repurchase. So if you want to use your remaining CGT allowance for this tax year, the best you can do is transfer the shares asap, sell on April 5th, transfer the money to her and she can then repurchase about a week later. For using your brought-forward losses, you can just as well do that with a sale next tax year as this, so the best solution may well be to transfer the shares asap, do a partial sale on April 5th, sell the rest about a week into the new tax year, then transfer the cash and she repurchases. Gengulphus
gengulphus
08/3/2018
10:30
Some years ago I transferred some shares to my wife. These now have quite a considerable unrealised CGT charge attached to them. She has no prior unused losses to offset and in previous tax years has utilised her annual exemption and will do again this tax year (2017-18)on other share transactions. I, on the other hand, have some cgt losses b/fwd and it seems sensible to utilise those by transferring the above shares from my wife to me and for me then to realise the gain (partly using what will be left of my annual exemption and also the balance of b/fwd losses). As I understand it, the transfer from my wife will be done at her S104 "cost" - thereby not triggering a taxable gain for her, as there is none. That "cost" would be used in determining my cgt gain on disposal (to be offset as described above). From the taxation of future dividends point of view it makes sense for her to hold these shares again (rather than me). My main question is: if I were to transfer the cash proceeds back to her (ie a couple of days after I have sold them) - would she fall foul of the 30 day rule? In other words, if she were to repurchase within 30 days would her new cost be deemed to be the original transfer value to me or the market price at time of purchase? If it is the "transfer value" - apart from the risk of being out of the market for 30 days - is there any other way round this?
fbrj
15/2/2018
08:45
For any other unfortunate holders of Carillion (CLLN) shares HMRC have confirmed to me by phone that they accept these shares have negligible value and will at some time in the future be adding them onto their Negligible Value Shares List. In the meantime they can included on self assessment tax returns so as to offset any CGT gains made above the CGT allowance, or for carrying forward into future tax years. Thanks once again to Gengulphus (and others) for devoting so much of his (their) valuable time in helping others understand the complexities of CGT. IE
investoree
02/2/2018
17:39
singh is king, Would appreciate a little help with CGT losses: Had shares in an AIM company called Beacon Hill Resources who went in to administration on 23/01/15. The company is now in the process of being wound up and the shares are deemed worthless. Does this mean that it is no longer possible to claim the loss on my tax return? No, it doesn't mean that. It does mean that you haven't actually realised the loss yet: you still own the shares even though they're worthless. Nor will HMRC treat you as though you had realised the loss until and unless you make a negligible value claim about them. If you already have made a negligible value claim about them (probably unlikely, but I'm trying to cover all cases, and much of what follows also applies if you haven't yet done so) and HMRC accepts it as valid, then they will treat you as though you had actually realised the loss on the date you stated the claim was for in the claim. If you fail to mention such a date in the claim, they assume that it's the date on which you made the claim - which is actually pretty unlikely to be the date you intend if the claim accompanies a tax return, so make certain you do specify a date on which you want to be treated as realising the loss! All that really matters in any normal tax circumstances is the tax year within which you want to be treated as having realised the loss - any date within that tax year will have the same effect on your CGT, as long as the claim is accepted as valid. For a claim to be valid, the following conditions must all be true (at least, there may be others that I haven't remembered offhand): * You must have owned the asset continuously from a time that it was not of negligible value up to the time you want to be treated as having realised the loss, or if later, the time you make the claim. That should be easy: the fact that you bought them (or otherwise acquired them) while they still had a market value should be enough evidence of that, barring the unlikely possibility that you have somehow managed to dispose of them since then (e.g. by a private sale or a gift to someone else) - if you have, you actually realised a capital loss at that point and neither need nor can validly make a negligible value claim. * The asset must have been of negligible value at the time that you want to be treated as having realised the loss (and also at the date that you make the claim if different). That should be easy as long as it is on or after the time that the administrator said there was no prospect of any return to shareholders and the administrator has not subsequently retracted that with any sort of statement that they've discovered previously-unsuspected assets or that liabilities have been discovered to be false for previously-unsuspected, in a way that means there now is a possibility of returns to shareholders (that's very rare, and I've never seen such a case, but I believe not totally unknown). Also note that I really do mean the time that the administrator said that there was no prospect of returns to shareholders, not the time the company went into administration - the taxman will want a professional opinion that the shares are completely worthless to shareholders, not just that the company is in severe enough trouble to require administration. * The date on which you want to be treated as having realised the loss must be in the same tax year as the date you make the negligible value claim, or one of the two preceding tax years. So for example, a claim made in a tax return for the 2016/2017 tax year, within the normal period for submitting such a tax return (i.e. 6 April 2017 to 31 January 2018), will have been made in the 2017/2018 tax year and therefore the date it says you want to be treated as having realised the capital loss must be in the 2017/2018, 2016/2017 or 2015/2016 tax years. And I wouldn't recommend anything other than a date in the 2016/2017 tax year - in particular, dates in the 2015/2016 or 2017/2018 tax years just create unnecessary confusion because they're not directly relevant to the tax return they accompany. And a date should be specified because it will otherwise be assumed to be the date you submit the tax return, i.e. within the 2017/2018 tax year and almost certainly not what you intended! Assuming that a negligible value claim is accepted, you are then treated as having realised your loss on the date you specified. As far as I know, that applies for all purposes, including potentially requiring amendment or correction of tax returns from that date onwards, and claiming that loss within the standard period, i.e. the tax year of the date on which you are treated as having realised it or one of the following four tax years. Note that a negligible value claim basically only claims that the asset has become of negligible value within your ownership period, which implies that you have made a loss - but not what the amount of that loss is. Claiming a realised or treated-as-realised loss for CGT purposes goes beyond that by telling HMRC the amount of the loss, so an accepted negligible value claim does not in itself constitute an accepted loss claim for CGT purposes. So both claims are needed in your circumstances, and the time limits on when each type of claim can be made are different, with those on the loss claim being more generous. The net result is that you are still within the time limits for claiming the loss, even if you made the negligible value claim to be treated as having realised the loss on the earliest conceivable date that HMRC might regard it as having been of negligible value, i.e. 23/1/15, and HMRC accepted that claim as valid. There is one other effect of an accepted negligible value claim besides treating you as having realised the loss on the date it specified, which is very likely (but not quite certainly) of no consequence whatsoever. You are also treated as having immediately re-acquired the asset at a base cost of the negligible value (probably £0.00) for all CGT purposes relating to future disposals (but not the deemed same-day disposal that treating you as having realised the loss on that day implies). This is simply because you do in fact still own the asset and will probably eventually dispose of it, as explained below, and had better have a base cost for the asset for your CGT computations when that happens. Most likely (by far), you won't have any proceeds from that disposal nor any other allowable costs for it, so the CGT computation will work out as (proceeds)-(base cost)-(further allowable costs) = £0.00-£0.00-£0.00 = £0.00, which you can ignore even if you realise that it's happened - it's neither a loss nor a gain that you must report, nor even a CGT computation that HMRC will be at all interested in! But it is just conceivable that something totally unexpected will subsequently be discovered that means there were returns to shareholders after all, and if that were to happen, you would need to do the CGT computation and report the resulting gain(s) to HMRC. So what about the more likely case that you haven't already made a negligible value claim? The good news is that for as long as you're still the owner of the shares, you still can and everything I've said about negligible value claims in general applies. So you can currently make a negligible value claim to be treated as realising the loss in any of the tax years 2015/2016, 2016/2017 and 2017/2018. If you choose a date in the tax year 2015/2016, you'll need to ask HMRC to correct your tax return for that year, as the deadline to amend it yourself expired on Wednesday, and if that produces a different figure for losses carried forward into 2016/2017, you'll need to amend your tax return for 2016/2017 accordingly. If you choose a date in the tax year 2016/2017, you'll need to amend your tax return for 2016/2017 accordingly. And in all cases, you'll have to fill in your tax return for 2017/2018 appropriately when the time comes - it will definitely be affected by the deemed capital loss if you choose a date in the 2017/2018 tax year, and might be via changes of losses brought forward from 2016/2017 if you choose a date in the 2015/2016 or 2016/2017 tax years. If you delay making the negligible value claim until April 6th or later, the tax years in which you can claim to be treated as having realised the loss will shift to 2016/2017, 2017/2018 and 2018/2019, and a similar shift will happen on April 6th of each subsequent year until you cease to be able to make a negligible value claim - which will eventually happen. Most likely, it will happen because the winding-up of the company is finished, with the final step being that the company is dissolved. At that point, shares in the company cease to exist and so you no longer own them and can no longer make a negligible value claim about them. But you're not out of luck yet, because you have just shifted from owning the shares to not owning them, and that makes it count as an actual disposal of the shares, causing an actual realised loss on the date of dissolution. So you haven't actually lost the opportunity to offset the loss even then - though you have lost the opportunity to choose the tax year in which it is effectively realised, and the time limit for claiming the actual loss starts to tick away: if you delay past the end of the 4th following tax year, you will lose the opportunity to offset the loss at that point. There are three other ways that I can think of that you might cease to be able to make a negligible value claim. One is the possibility I've mentioned twice above that something unexpected happens that makes returns to shareholders reasonably plausible again, in which case the shares cease to be of negligible value and you have to wait until the winding-up is completed and the company dissolved or it becomes possible to sell the shares again - but as also mentioned above, that's a very faint possibility. The second is that you do manage to dispose of them by private sale or gift. But don't expect that to be any easier than a negligible value claim: neither is a normal "at arm's length" commercial bargain, so they are subject to the "market value" rule - which means that the buyer/recipient is deemed to have paid you their market value regardless of whether they actually paid you anything or if so, how much they paid - so you have to convince HMRC that they're of essentially no market value just as much as you would for a negligible value claim. On top of that, you have to find a willing buyer/recipient who is not one of your "connected persons" (close family, business partners, etc), as otherwise you realise the loss, but it becomes a "clogged loss" which you are severely limited about using. Also, for any buyer/recipient, I'm not certain what the situation is about registering the transfer to the new owner during administration / winding-up of the company: if it isn't possible, you get stuck with the legal ownership even though the new owner is the beneficial owner - so you solve the CGT issue (CGT responsibility is determined by beneficial ownership) but at the expense of effectively becoming a trustee holding the shares on their behalf... All in all, I don't see that it's any better than making a negligible value claim, and it may be worse. The third way to cease to be able to make a negligible value claim is the one that makes me certain that it will eventually happen: it's that you die before any of the other ways to cease to be able to make one happens! At the point of your death, you obviously cease to be able to make any claims at all, and everything to do with your CGT affairs gets forgotten except for gains and losses realised before your death whose CGT you had not yet dealt with - at least the ones realised in the last partial tax year that you were alive cannot yet have been dealt with, as CGT is based on the total net gains for the entire tax year, and before one's death, one cannot be certain that total won't be added to until after that tax year is complete. Realised gains and losses in the previous tax year might also need to be dealt with by your executors (or whoever else administers your estate) - it depends on whether you'd yet submitted the tax return for that tax year by the time of your death. And whether your executors can submit valid negligible value claims after your death about losses to be treated as realised before your death strikes me as distinctly dubious - on the face of it, they've only owned the assets in any sense at all from the time of your death to the date they make the claim, during which the assets have been of negligible value throughout and so haven't become of negligible value. There might well be an obscure special rule somewhere to override the normal rules about what makes a negligible value claim valid, but if so, I don't remember ever having come across it... The net result is that I think a loss that you still could make a negligible value claim about, but hadn't yet actually made one, might still be claimable by your executors, but I also think there is a high chance that it is not. So to try to sum the above up reasonably briefly, you're not out of time to be able to offset the loss. The easiest and safest way to do that is in my view a negligible value claim, which also has the advantage of some (but not total) flexibility to choose the tax year in which the loss is treated as being realised to be one that has a good combination (in your circumstances and as you view it) of reducing your CGT as much as possible and involving as little work amending/correcting past tax returns as possible. You can delay it, and probably should if none of the currently-available tax years for a negligible value claim offers a good combination. And there's no fixed deadline beyond which making a negligible claim ceases to be possible, but you can find yourself suddenly unable to make one at zero notice, most likely because winding up the company has finished and the company has been dissolved. In that case, you'll still be able to claim the loss for CGT purposes, but not to make a negligible value claim about it, and you will completely lose the flexibility: the date on which the loss is realised becomes fixed as the date of dissolution and no longer subject to any choice by you. So delaying making the negligible value claim does have risks, and I wouldn't delay it unless I was fairly certain it also had benefits that clearly outweighed those risks. Gengulphus
gengulphus
02/2/2018
09:18
amalanchier3, Final para - do you not use the losses to reduce the gains to the tax free level and then carry the remaining losses forward? I.e, you do not lose the tax free benefit in the relevant tax year. That's the rule that applies to brought-forward losses - i.e. losses that have already been carried forward from one tax year to the next at least once. But quoting the final paragraph you refer to (it's quite a long way up now!), with the important words emboldened it says: "Not "can offset", by the way - once you realise losses or are treated as realising them, you must offset them against gains you've realised in the same tax year as far as possible, and if there are further losses after all the gains have been offset, you then must carry those losses forward into the next tax year. I.e. essentially, the decision you make about whether to make the negligible value claim is the last one you make that affects the result of the CGT calculations: everything after that is a matter of doing the CGT calculations correctly, not of changing what their result should be." I.e. it's about same-year losses rather than brought-forward losses, and the rule about them is as it states: they must be used against the gains realised in that tax as far as possible. In normal circumstances (*), that means that you only stop using them when there are no gains left, and so losses only start being carried forward when the losses you've realised in a tax year are in excess of the gains you've realised in the tax year, and only the excess losses start being carried forward, not all of them. And the CGT allowance is most certainly a "use it or lose it" allowance - it's basically the CGT equivalent of the Personal allowance for Income Tax. If you don't have enough income in a tax year to use your entire Personal allowance, the rest is wasted rather than saved up for use in future tax years; likewise if you don't have enough net capital gains in a tax year to use your entire CGT allowance, the rest is wasted rather than saved up for use in future tax years. But in that, "net capital gains in a tax year" means capital gains realised in the tax year minus capital losses realised in the same tax year. I think brought-forward capital losses are instead the equivalent of income losses from earlier years, but am very uncertain about that because I've never had such losses and I generally only delve into complex areas of taxation when I personally encounter them, or someone from close family or otherwise particularly close to me encounters them and asks for my help. So basically all I know about income losses is that a question on this year's tax return's additional information pages asks for "Earlier years’ losses – which can be set against certain other income in 2016–17" under the heading "Other income losses" and similar questions in earlier tax returns, plus a few quick mentions in newspaper articles I've read. The wording "certain other income" in that question is enough to make me pretty certain that it will be a complex area! The process is equivalent (or at least very nearly so - there might be an obscure case where it isn't that I've missed!) to first using same-year losses, then using the CGT allowance, then using brought-forward losses, with each step able to go down to zero gains left, and obliged to if it can, even if subsequent steps would get there anyway. (That applies in principle even to the third step, though obviously not in practice because there are no subsequent steps under the current CGT rules.) Any losses left over after the first and third steps are carried forward to the next tax year; any CGT allowance left over after the second step is wasted, which means that any same-year losses used in the first step for reductions of gains in the range from the CGT allowance down to zero are obligatorily used, but effectively wasted. It's actually expressed with the second and third steps swapped around, and using brought-forward losses only obligatory down to the CGT allowance, not all the way down to zero. I suspect the reason why it's expressed that way is historical. Specifically, the effective CGT rate that applies to any particular gain has at times in the past been specific to each particular gain, most notably for gains realised between 6 April 1998 to 5 April 2008, which got a taper relief that was determined by how long that specific asset had been owned for. The order was then to apply same-year losses to the individual gains (until there were no same-year losses or no gains left), then apply brought-forward losses to the individual gains (until there were no brought-forward losses left or the remaining gains were down to the CGT allowance), then apply the appropriate amount of taper relief to each individual gain (which was why losses had to be applied to individual gains - they had to be separately accounted for up to this point), then total the remaining gains and apply the CGT allowance to them. One consequence of that was that one could be forced to waste brought-forward losses offsetting gains that were outside the CGT allowance before taper relief, but reduced to within it by taper relief - which is why I say that in principle, offsetting brought-forward losses is obligatory even if subsequent steps would do the job anyway. Anyway, getting rid of the taper relief was done in the 6 April 2008 CGT rule changes, and led to a tremendous simplification in CGT reporting because individual gains could be totalled much earlier in the process rather than being separately accounted for up to and including applying taper relief, and another because it was no longer necessary to get an exact acquisition date for each realised gain. But the result of taking taper relief out of the previous computation order and reducing to computations on totals rather than on individual gains where possible is the current same-year losses / brought-forward losses / CGT allowance order, and that seems to have been as far as the simplification process went... (*) There is at least one case where a loss is only usable against certain types of gain, namely when you've realised a loss in a disposal to a 'connected person'. In that case, you can claim the loss, but it's only usable against gains realised by other disposals to the same 'connected person'. So such 'clogged losses' may end up being carried forward many times before (if ever) one realises a gain they can be used against, and are a reason why "as far as possible" is the strictly correct wording of the rule about using same-year losses, rather than "until there are no gains left". I don't know of any other CGT rules that say a loss can only be used against some types of gain - but only means I'm pretty certain that if there are such rules, they apply only in very unusual circumstances, not that there are no such rules... Gengulphus
gengulphus
29/1/2018
20:47
Would appreciate a little help with CGT losses: Had shares in an AIM company called Beacon Hill Resources who went in to administration on 23/01/15. The company is now in the process of being wound up and the shares are deemed worthless. Does this mean that it is no longer possible to claim the loss on my tax return? Thanks in advance for any advice.
singh is king
26/1/2018
06:01
Gengulphus Final para - do you not use the losses to reduce the gains to the tax free level and then carry the remaining losses forward? I.e, you do not lose the tax free benefit in the relevant tax year. A
amalanchier3
25/1/2018
21:21
I'm trying to assess CGT liability on a possible sale of shares in United Utilities (UU.). 2000 shares were bought in 2005. There were no subsequent purchases or sales. In 2008 UU. undertook a consolidation of 17 for 22 and paid out 170p per old share, resulting in a holding of 1545 shares and a repayment of £3400. Shareholders were given a choice of three ways to receive the money; briefly the choice seems to have been capital repayment, dividend or delayed capital repayment. I suspect the holder took the first option, though I don't know for sure and I don't know if it makes any difference. My instinct would be to take the total purchase price, subtract the £3400 and take the result as the cost of the new shares. However the broker's statement shows a "reduction of book cost" of £3165.43 (158.2715p per share). If this is correct the effective purchase price of the new shares is higher and the resulting CGT bill if they're sold will be lower. So I hope it is correct, but I'd like to understand why it might be so.
finkwot
18/1/2018
10:45
Gengulphus. Thank you for spending what must have taken you a considerable time to provide such a comprehensive and helpful response to my question on CLLN's 'Liquidation' on being able to determine, if, when and how it qualifies for having 'Negligible Value' status. I am sure that the links and information will be very helpful for anyone else who is unfortunate enough to end up in a similar position. Thanks once again IE
investoree
18/1/2018
04:32
Gengulphus can you or anyone else provide any information whether the liquidation of CLLN today (my largest long term holding) means that they immediately qualify as having negligible value for shareholders and that those not held in an ISA can be used as a CGT loss within this tax year? No, I cannot, not for certain - but it looks very likely to me. See later sections of this reply. I have gone round in circles this morning looking through HMRC's CGT manual and am none the wiser for my efforts. ... I rather suspect that's because you've gone to the CGT manual as your first resort - not a good idea because you're liable to get lost in the mass of detail, as looks to have happened. It's generally best to look at the simpler, more taxpayer-friendly introductory material first, study it thoroughly, then fall back on the CGT manual if still needed - it quite possibly won't be, and if it is, the study of the introductory material will at least give you a basic idea of what's going on, which is quite important when finding your way around the taxman-oriented manual. In this case, I found that a simple internet search for "negligible value" quickly led me to HMRC's Helpsheet on negligible value claims: 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/negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-hs286-self-assessment-he I should add to that the introductory material may well be lacking information that puts what it does say in context - so try to avoid reading more into it than it actually says. For example, in this case it says that "You cannot make a negligible value claim after the company has been dissolved." Which is basically true: you cannot do that - but don't read "if you wait until after the company has been dissolved, you're out of luck" into it: the truth is that when the company is dissolved, its shares cease to exist, so you cease to own them. That counts as an actual disposal of the shares, actually realising the loss on the date of dissolution. So you no longer need "to be treated as though you had sold the asset and immediately reacquired it", which is the effect of a (successful) negligible value claim according to the introductory material. And it would create thorough conceptual confusion for you to be treated as having sold something that neither you nor anyone else owns and indeed doesn't even exist - which together with not giving opportunities to waste everybody's time is presumably the reason not to allow such claims. So you can actually still get the benefit of the loss - indeed, you no longer have any choice about getting it, other than by failing to tell the taxman about it within the further "end of the 4th tax year after the one in which it was realised" deadline that applies to all actually-realised losses. It's just that a negligible value claim is no longer either needed or even allowed as part of getting that benefit. ... Also does anyone know the link for HMRC's list showing shares of negligible value and how long it normally takes for them to appear on it? https://www.gov.uk/guidance/negligible-value-agreements - but note what it says about what it is: "shares formerly quoted on the London Stock Exchange which have been declared as Negligible Value up to 31 December 2017". It doesn't cover shares not formerly quoted on the London Stock Exchange, and in practice that doesn't seem to include any AIM shares - I suspect that's a technicality either about whether AIM is technically part of the London Stock Exchange or about what exactly "quoted" means technically. (This isn't of course relevant to Carillion, which was quoted on the main market, but it's an important part of understanding what the list is - in particular, one can make a negligible value claim and have it accepted without the share ever appearing on the list, and indeed, I suspect that that's what happens to most negligible value claims - they're probably about collapsed private companies...) It also doesn't cover shares not yet declared (presumably meaning declared by HMRC) to be of negligible value - and the process of declaring a share to be of negligible value will almost certainly take some time. I've no idea just how much, though, other than that the signs are that it only happens in response to someone making a negligible value claim and having it accepted by HMRC. Carillion is prominent enough that I expect a negligible value claim to be made about it quite quickly, and looks like an open-and-shut case to me, that HMRC should be able to investigate and rule on comparatively quickly, so I would expect a declaration that Carillion is of negligible value to be as rapid as such declarations ever are. But HMRC's processes are often very slow by modern standards, so that isn't necessarily saying all that much! Thanks in advance for any help as share sales already made for this tax year have now been thrown into total disarray as I have already sold some at a loss in order to offset the planned sale of either a Buy to Let flat, or some other profitable shares if the flat sale doesn't complete by the end of this tax year. No, share sales already made for this tax year have not been thrown into total disarray, because you're under no obligation to make a negligible value claim about Carillion for this tax year, nor to use the date on which HMRC first accept that the shares were of negligible value if and when you finally do make a negligible value claim. (Indeed, in cases other than "shares formerly quoted on the London Stock Exchange", you wouldn't have any real way of knowing what that date is!) They will be thrown into total disarray if you make a negligible value claim about Carillion for this tax year, but the solution to that is obvious: don't make such a claim! And they will be thrown into total disarray if Carillion is dissolved this tax year, but unless the timescale of liquidations is much shorter than that of administrations, that seems extremely unlikely to me... Further to the above query - PWC who have been appointed as liquidators for CLLN have stated in their announcement today "Unfortunately, as a result of the liquidation appointments, there is no prospect of any return to shareholders." Does this mean that I can utilise the entire cost of my CLLN shareholding purchase for purposes of CGT losses to offset against gains with immediate effect this tax year? I can't be absolutely certain what HMRC will accept as sufficient evidence for a negligible value claim, but that statement by the liquidator does look to me like very good evidence that the introductory material's statement that "An asset is of negligible value if it is worth next to nothing" applies. So yes, I think a negligible value claim would be successful, and if so, yes, you'll have bought the Carillion shares for their entire allowable cost and be treated as having sold them for nothing, so will be treated as realising a loss of their entire allowable cost which you offset against your gains this tax year. But I cannot guarantee that HMRC will accept it as conclusive evidence that the claim is valid. Only HMRC can do that, and within its limits, that's what they do in the negligible value list. Not "can offset", by the way - once you realise losses or are treated as realising them, you must offset them against gains you've realised in the same tax year as far as possible, and if there are further losses after all the gains have been offset, you then must carry those losses forward into the next tax year. I.e. essentially, the decision you make about whether to make the negligible value claim is the last one you make that affects the result of the CGT calculations: everything after that is a matter of doing the CGT calculations correctly, not of changing what their result should be. Gengulphus
gengulphus
15/1/2018
11:06
Further to the above query - PWC who have been appointed as liquidators for CLLN have stated in their announcement today "Unfortunately, as a result of the liquidation appointments, there is no prospect of any return to shareholders." Does this mean that I can utilise the entire cost of my CLLN shareholding purchase for purposes of CGT losses to offset against gains with immediate effect this tax year?
investoree
15/1/2018
09:51
Gengulphus can you or anyone else provide any information whether the liquidation of CLLN today (my largest long term holding) means that they immediately qualify as having negligible value for shareholders and that those not held in an ISA can be used as a CGT loss within this tax year? I have gone round in circles this morning looking through HMRC's CGT manual and am none the wiser for my efforts. Also does anyone know the link for HMRC's list showing shares of negligible value and how long it normally takes for them to appear on it? Thanks in advance for any help as share sales already made for this tax year have now been thrown into total disarray as I have already sold some at a loss in order to offset the planned sale of either a Buy to Let flat, or some other profitable shares if the flat sale doesn't complete by the end of this tax year.
investoree
13/1/2018
19:37
Gengulphus Many thanks for such a clear and concise response. You should be charging for this service, I am really appreciative of your efforts. Regards G2
geordy2
13/1/2018
17:46
Handykart- Thank you, seems to be fine now.
gbh2
12/1/2018
19:04
geordy2, I have a gain in the current tax year which is less than £5000. I also have a carried forward loss from a previous year of £7000. Will this years gain be offset against the previous loss, ... No. Same-year losses have to be offset against gains all the way down to the remaining gains being zero, but losses brought forward from previous tax years only have to be offset against gains until the remaining gains are down to the CGT allowance. (Or in both cases, until the losses concerned have run out, of course.) ... and do I even need to show the c/f loss or save it for next year when hopefully my gain will be in excess of the CGT allowance. Technically, I believe the £7k loss is brought forward from the 2016/2017 tax year into the current 2017/2018 tax year, during which it is not used, and so then gets carried forward again into the 2018/2019 tax year. (Assuming you do actually mean the current tax year - if you instead mean the tax year whose return is due at the end of this month and that you are therefore currently working on, subtract 1 from all those year numbers!) Note that I say that the £7k loss is brought forward from the 2016/2017 tax year rather than just "a previous tax year". That's because if it originally arose in say the 2014/2015 tax year, the same principle says that it will first have been carried forward unchanged into 2015/2016, then carried forward unchanged again into 2016/2017, then carried forward unchanged yet again into 2017/2018, resulting in the above happening. And for a similar reason, I say that the loss is carried forward into the 2018/2019 tax year, not just "a future tax year". As to what you show on the tax return concerned, it depends on whether you have to fill in the capital gains section at all. If you don't (and I don't see any reason why you definitely do in what you've told us, but there might be in details you haven't told us, e.g. if the size of the £5k gain depends on making a CGT claim), then you don't have to say anything at all. Personally, though, I would stick something in an additional information box somewhere saying something like "I do not need to fill in the capital gains section, but I have £7,000 allowable losses brought forward from [year of the last tax return that described them]. None of them are used and they are not added to in 2017/2018, so they are carried forward into 2018/2019." That makes "what were these losses???" questions from the taxman less likely, and also could be a useful reminder to yourself about where the details can be found. If you do have to fill in the capital gains section, I would answer the questions it poses about brought-forward and carried-forward losses on the above basis - i.e. that £7k is brought forward from the preceding tax year, none of it is used during the tax year, and so £7k is carried forward into the following tax year. Having said all that, if someone has filled in a past tax return by not saying anything at all about brought-forward losses that are neither used nor added to, I can hardly see them getting into trouble about it. It makes no difference to the tax due and at worst, they've suffered an understandable misunderstanding about what's expected and in the fairly unlikely event that the taxman picks up on an apparent inconsistency and asks for an explanation, might have to explain the exact situation behind their answers. Gengulphus
gengulphus
11/1/2018
19:58
I have a gain in the current tax year which is less than £5000. I also have a carried forward loss from a previous year of £7000. Will this years gain be offset against the previous loss, and do I even need to show the c/f loss or save it for next year when hopefully my gain will be in excess of the CGT allowance. Regards G2
geordy2
Chat Pages: 331  330  329  328  327  326  325  324  323  322  321  320  Older
Your Recent History
LSE
CGT
Capital Ge..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20191016 09:52:08