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  • RE: Using previous unreported losses

    Hi So following on from the above - I sent my letter on 11/11/2021. It was signed for according to Royal Mail tracking on 15/11/2021. I have heard nothing since, and am tying to complete my return. I have called HMRC today, and after 45 minutes on hold have been advised that, despite having proof of delivery, there is no record of it having been received, and there's nothing they can do unless I send the letter again - and it might get processed some time in February - clearly no use to me given the deadline is the end of January! Firstly, is there no way to email this and fast-track, given it's been lost through no action of my own? If not, then from the example in my original post, as the letter has been lost, I'm going to have to go with "Option 1" and only use the already declared carried-forward from several years ago. What then will happen now when my letter is processed after the deadline date? Will the losses available for future years be correctly accounted for, despite the "starting" value now changing (as I'll have used some of it in my 2020/2021 submission)? Also - the losses I'm declaring from 2017/2018 - will they still be valid assuming this is processed before the end of this tax year (provided the letter isn't lost again!?) Thanks
  • RE: Using previous unreported losses

    Hi, thanks. A quick follow up to this. According to this link: - https://www.gov.uk/government/organisations/hm-revenue-customs/contact/capital-gains-tax-enquiries-for-individuals-employees-and-self-employed I can write at one of the following addresses: - Capital Gains Tax Queries HM Revenue and Customs BX9 1AS United Kingdom HMRC Direct BX5 5BD United Kingdom The first being CGT Queries - the second being CTG Payments. Can you confirm which is the correct address please to report losses, as it is neither a query nor a payment. Also - what is the expected turnaround time to confirm they have been recorded? Thanks
  • CFD Calculations for CGT

    Hi I'm wondering how one would represent gains/losses on CFDs for CGT. The report I get from my CFD provider (IG) is along the following lines: - Closing Reference, Close Date/Time, Opening Reference,Open Date/Time, Instrument Name, Size, Open Price, Close Price, Funding Charges, Dividends, Commission, Total P/L ABCDE,1/1/2020,FGHIJ,1/1/2018,Arbitrary LTD,1000,1.20,1.30,-50,100,-10,140 There will potentially be a number of individual contracts in this format. In theory they are very simple - the last line takes into account the total gain/loss for that position, wrapping up funding charges, commission, dividends and the difference in value of the underlying instrument on closing. So adding all those together gives the total gain/loss. In fact, the example here shows how to derive your gain/loss in exactly this way: - https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg56101 However, there are 2 concerns I have here. Firstly - the forms talk about "allowable costs" and "disposal proceeds", whereas that isn't so simple with a CFD. In fact, the HMRC example above doesn't actually show this - it shows how to derive the total gain/loss, but not how to derive the "allowable costs" and "disposal proceeds" which are required for the forms. The problem with a CFD is that the initial cost is the commission. Then there's funding costs whilst the contract is open. Then when you close, you get the "difference". You have a "deposit" based on the margin rate, as shown in the example linked, but that's not really a "cost" as such - and in fact the margin can change throughout the life of a contract - e.g. on opening it may be 20% but the broker may change that to 50%, or 10% - all you have to do is make sure your account "covers" the margin requirement at any given time. --- So the first question is how does one actually derive the numbers required for the forms. I see two options: - In the example line above: - A contract for Arbitrary LTD was opened on 01/01/2018 for 1000 shares at £1.20 (nominally £1,200) It was closed on 01/01/2020 at £1.30 (nominally £1,300) The initial commission was £10 So the difference is £100 In addition, the total cost of the funding was £50 A £100 dividend was paid during the contract The total gain was therefore £100 difference + £100 dividend - £50 funding - £10 commission = £140 So calculating the gain/loss as above is simple. But how to calculate the allowable costs and disposal proceeds to fill in the forms? One option could be to use what the cost of the underlying share would have been, so for example: - Allowable Cost = £1,200 for the underlying shares + £10 commission + £50 funding cost = £1,260 Disposal Proceeds = £1,300 value for the underlying shares + £100 dividend = £1,400 The difference therefore would be £140 as expected This however seems disingenuous because £1,200 was never actually "spent". Another option could be to ignore the cost of the shares and just use the actual costs, so: - Allowable Cost = £10 commission + £50 funding cost = £60 Disposal Proceeds = £100 (the P/L for the difference) + £100 dividend = £200 Again, the difference is £140 However in this example, Disposal Proceeds would be negative in the event of a loss. I'm leaning towards the second as being more correct, but would appreciate a steer if either is correct/wrong - or am I over-thinking this? --- The second question is regarding Section 104/30 day/Same day rules. Given a CFD contract isn't actually buying a share - it is a separate contract, with its own references, is it reasonable to treat each one individually and simple add the gains/losses as listed by the broker? Or, if there are different contracts for the same underlying instrument/company, must they be treated as the same asset and pooled accordingly? With the CFDs, each close is matched to a specific open, and all funding is associated with that end-to-end contract. So if pooling etc does need to be taken into account, I'm struggling to see how that could effectively be derived if for example I had to break out all the separate open/closes and match them to different open/closes and try and derive the underlying costs which the broker doesn't break down. --- Reading back it's a long question, but I hope the detail in the example helps! Thanks
  • Using previous unreported losses

    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