Hi
In 2020/21 I made a capital gain which is >£12,300 through Crypto, and so need to submit a return. I made and reported a loss several years ago through self assessment that I will be able to use to reduce that gain to below the £12,300 threshold. I'm comfortable with how to do this.
Where I'm a little unsure is - I have some other losses from the last 4 years which I haven't yet reported as I stopped needing to submit SA. These loss values are not needed to offset this particular gain, however I'd also like to report these to be able to use against the following year(s).
I understand to report those I need to write to HMRC (outside of self assessment) to notify of those. I'm assuming that having those "logged" will take a period of months? In which case, there's likely to be an "overlap" in the time when I report those losses and when I submit SA, so would like to understand how to handle it in my SA.
So - take a simple example: -
I reported a £2,000 loss 10 years ago
I lost £3,000 in 2017/18 but didn't report it
I lost £3,000 in 2018/19 but didn't report it
In 2020/21 I made a £13,300 gain
I need to report the 2017/18 loss within 4 years - so by April 2022. So I intend to send a letter to report the details of the £6,000 imminently.
I now need to fill in my self assessment, not knowing whether those new losses will have been "logged" by the time the SA is processed. The way I see it, there's 2 options: -
Option 1
Submit SA and ignore that £6,000 for now. Then use "losses brought forward and used in-year" of £1,000 (to take gain down to £12,300) and "losses available to be carried forward" of £1,000, being the unused remainder of the £2,000 losses declared 10 years ago.
Then in future, use the £7,000 value (the remaining £1,000 and the "new" £6,000) on the assumption that the report will have been processed at some point.
Option 2
Submit SA and assume that the £6,000 will have been processed. The "losses brought forward and used in-year" would still be £1,000 to reduce the gain, and "losses available to be carried forward" would be £7,000.
My worry is how the overlap will be handled. If I do Option 1, where I've "carried forward" £1,000 - is there a chance that this could wipe out the declaration of the £6,000 if that does get processed before the SA? Similarly if I do option 2, but the other report hasn't been processed yet - could I be pulled up for carrying forward losses that haven't yet been officially declared?
I may be over thinking this, but not knowing exactly how these figures are stored in the HMRC systems it's hard to know what is the correct way to handle it.
Thanks