Carrying forward CGT loss

I am struggling to understand the CGT rules for carrying forward a CGT loss and would appreaciate some guidance. In 2022/23 I sold some UK shares (3 transactions) - A. Total gains - £12944 B. Total losses - £10737 C. Losses brought forward from earlier year - £2229 D. CGT allowance - £12300 The software that I use for my SA return showsthat I have used £2207 (A-B) of the annual exempt amount and that I will only carry forward the earlier years loss of £2229. In order to hit the £12300 CGT allowance I only need to 'allocate' a loss of £630 (A-D) so have I 'lost' the balance of the £10737 losses or can I carry forward the balance of £10093 (B-£644)? Any guidance would be most welcome.

Hi
Losses that occur in the year must be used first even if that means you dont get the full use of your annual exempt amount.
For your scenario, as your losses are less than your gain, you will be using all of these before using any of the annual exemption.
You can still carry forward the previous years loss of £2229 to later years.
Thankyou.

This is what I am struggling to understand as well. Say in 2023/24 if I make a gain of £7000 and CGT allowance is £6000, then I will be £1000 over the exemption limit. Can I then deduct £1000 from the previous years loss and carry forward £1229 into the later years?

Hi Raj S,
Yes, You can carry forward any unused losses for CGT.
Only losses that occur in the same year must be utilised first before using any of the annual exempt amount.
If you then don't use all of the losses, these can then be carried into later years.
Thank you. 
 

So, in the later years can I just deduct the gains above the exemption limit from the unused losses carried forward from previous years?

Hi Raj S

Yes, that is correct. You can find guidance here -  Capital Gains Tax: what you pay it on, rates and allowances

Thank you

Thanks Admin 5 - useful reply. The dilemma is transfer of shares to investment ISA to fully utilise the £20K allowance versus fully utilising the CGT allowance. Needs careful thought!

Hello, Can I pose a question re the CGT gains and losses on shares please as i'm entering figures into my SA return and i'm confused! I have made 20 different disposals within a year and I have gains of £4k and losses of £7.4k so a net loss of £3.4k. After entering all the data the return states I have a gain of £4k and then I get to the Losses and Adjustments page and trigger the confusion! Where do I enter the loss of £7.4k so as to show the correct net loss position of £3.4k? Do I need to enter the £7.4k loss? Do I get to carry over the £7.4k loss to future years or is it only the net that I carry over? On a separate note, as I said I have 20 sales which is great because the SA return lets you enter data for 20 disposals but what if I had 21 or 101, how would I enter the data? Surely there are people out there dealing hundreds of times per year! Thank you in advance

Hi Jim,

In the listed shares section of the capital gains part of the online tax return, you enter the number of disposals, the disposal proceeds, the allowable costs, gains in the year (before losses) and then losses in the year.  
You do not need to itemise each of the disposal, instead enter summary figures. You can attach a pdf file further on in the tax return showing each of the transacions to support your summary figures. Each box has a blue triangle, click on this for additional information.

Thank you.

I have incurred and reported Capital Losses resulting from investments in mutual funds over a number of years but have not had any necessity to use these against profits in subsequent years. Now that allowances are so low, I am likely to incur a taxable Capital Gain on sale of mutual funds in the near future. I have in my last return a positive sum in line 47 of my tax return representing these historic losses. Is use of these losses time limited or can they be used at any time after incurred and reported? In order to use these losses against current year's Capital Gains (if the year's allowance is exhausted) is it merely a matter of reporting the profit for the tax year in question and deducting the prior reported losses from line 47 of the prior year's return or is some other process necessary in order to utilise these historic losses?

My understanding is that, provided you have reported the losses in previous tax returns, and provided that they have not been used to offset gains in earlier years, you can carry them forward indefinitely. This is referenced at https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15800#use-of-losses-general-rules. I am not a tax expert so please do wait for confirmation from one of the experts in this forum.

Hi keynesian,
There is no time limit to utilising losses against capital gains.
You can carry them forward indefinietely.
Thank you. 
 

Hi Gwyndy,
As long as the losses are reported within 4 years of them arising, they can be carried forward indefinatley.
Thank you.

Two more related questions about CGT, please – 1. Calculating capital gain after rights issues and consolidation Buy 1000 shares in Company A - total cost £15657. Bonus issue 2:1 (2000 shares) at no cost – holding now 3000 shares. Rights issue – purchase 1833 shares at total cost £3666. Total holding now 4833 and total cost of shares to date - £19323. Bonus issue 1:40 (120 shares) at no cost – holding now 4953 shares. Consolidation 1:10 at no cost – holding now reduced to 495 shares. Sell 185 shares – total proceeds £476. Holding now 310 shares with total cost of £19323 - £476 = £18847 Current value of remaining shares is approx. £865. I now wish to sell these shares (or part) and use the loss to offset other gains. Am I correct in thinking that, despite the various bonus issues, rights issues, and consolidation, the calculation of the capital loss is legitimately the total ‘original’ cost of the remaining 310 shares, £18847, minus the sale proceeds, £865 – i.e. £17982? 2. Calculation of CGT loss carry-over Current year gains - £11889 CGT loss carried fwd - £2000 Annual exempt amount (2024/25) - £3000 If my calculation of the capital loss in Company A above is correct and I sell all the shares and offset this loss against current year gains, what is the carry-over of loss to future years?

Hi Gwyndy,
Please refer to:
Shares and Capital Gains Tax (Self Assessment helpsheet HS284)
On how to work out any gain/loss. if a loss, the in year loss must be used first against any other capital gain made even if that means you lose out on the annual exempt amount.
If the loss is higher than your gain for the year, unused losses can be carried forward but that is for you to work out any figures.
Thank you. 
 

Hello. In October 2023, one of my investments in a publicly listed share in Australia went to $0/share and became worthless. The company has gone into bust. Over the 2023/24 tax year, I did not have any capital gains so there is nothing I can offset this against. Question 1: Can I roll forward the capital loss credit to the 2024/25 tax year? Question 2: Assuming I can, do I need to inform HMRC about this when I file my 2023/24 UK taxes? If so, where/how do I inform you?

Hi vbino69 Knipmeyer,
Please refer to the following Guidance - Capital Gains Tax: what you pay it on, rates and allowances
Thank you.
 

Dear HMRC, I understand that an in-year capital loss must be used first against any other capital gain made even if that means I lose out on the annual exempt amount. Do I also understand correctly that if my overall capital gain - after deducting all capital losses- is below the annual exempt amount that I do not need to report it (i.e. all separate capital losses and gains) in my self assessment return?

Hi osti640,
If your overall Capital Gain is less than the Annual Exemption Amount then you do not need to report the Gain in your Self-Assessment (SA) Return - please see the following Guidance - https://www.gov.uk/capital-gains-tax and Capital Gains Tax: what you pay it on, rates and allowances.
Thank you

Dear HMRC, If there were recorded losses from the disposal of foreign shares and securities in the past two years, can I use such capital losses to offset my income in box 39 of SA105 (Loss brought forward used against this year's profit)? If this is the case, I wonder if there is a ceiling limit for this box. By the way, how many years can we carry forward such capital losses? Thank you so much! Kind Regards, Mike