writing off investments against tax

B

brian

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Hi,

I am a sole trader IT contractor. I bought shares with profits from the company, which has since decreased in value. Can I write off the decreased amount against my taxable income? Can I write off other costs involved in the purchase of the shares eg stamp duty etc? I also bought shares before one year before the company was created, which have also lost value, can these be similarly written off?
I will of course ask my accountant, I just wanted to get some background information first,

thanks,

Brian
 
You cannot write off gains or losses in share dealing against income tax - these are Capital Gains Tax (CGT) losses.

A CGT gain or loss arises on disposal of the shares AFAIK and if you still own the shares, then no taxation change arises.
 
thanks for your reply. So the CGT loses could not be written off against company profits (as opposed to income to employee),

Brian
 
I'm sorry, I don't understand - what company profits as you say you are a sole trader in your original post?
 
Brian, at this stage you do not have any CGT loss as you have not sold the shares - they are simply worth less than you paid for them. If you sell them & realize a loss, you can carry that loss forward to be used against another CGT gain (if you have additional shares or assets.

The shares have nothing to do with you business & you can;t offset the CGT loss against Income/salary.
 
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