4 week rule and loss offsetting

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Moolahasker

New Member
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5
Hello,

I made the following trades in companies shares this year:


CompanyActionDateNum sharesEUR Value
CompABuyMay 9th1001500
CompBBuyMay 14th 1001600
CompCBuyJune 4th10500
CompCSellJune 4th10430
CompDBuyJun 28th1002300
CompDSellJuly 8th1002700
CompBSell July 11th1001700
CompABuyJul 24th35350
CompASellAug 5th35280
CompASellAug 5th100800

The number of shares illustrates that entire lots of shares were sold, so each sale is either fully lifo or fully fifo.

I'm a bit confused about whether I can use losses sold within 4 weeks of purchase to offset other gains.

IF I just subtract Buy cost from Sell cost, it looks like I made a loss of 340 eur. Do I have to make special account for shares sold within 4 weeks of purchase?

I made a loss on CompA shares sold on Aug 5th which were bought Jul 24th. If I sell shares in different CompE tomorrow at a gain, can I offset the loss from the 35 shares sold on Aug 5th, due to them being the same class of shares?

Also - the name bed and breakfast sort of implies you would Sell shares (with a gain) one evening and rebuy them the next day, in order to re-base the capital gain. Does the disposal and repurchase have to be on different days, or can I sell and buy on the same date?

Thanks!
 
There are two relevant rules in the Revenue guidance.

1) Shares sold within four weeks of acquisition are treated as LIFO not FIFO (Section 3.1):

2) Losses on shares sold within four weeks of acquisition cannot be offset against gains on other companies (Example 2):

Selling or disposing of shares

This page is an explanation of the special rules that apply to CGT on shares
www.revenue.ie www.revenue.ie
 
Last edited:
CompanyActionDateNum sharesEUR ValueWithin 4 weeksGain/lossOffset loss
CompABuyJul 24th
35​
350​
CompASellAug 5th
35​
280​
Yes - LIFO
-70​
No
CompABuyMay 9th
100​
1500​
CompASellAug 5th
100​
800​
No - FIFO
-700​
Yes
CompBBuyMay 14th
100​
1600​
CompBSellJuly 11th
100​
1700​
No - FIFO
100​
CompCBuyJune 4th
10​
500​
CompCSellJune 4th
10​
430​
Yes - LIFO
-70​
No
CompDBuyJun 28th
100​
2300​
CompDSellJuly 8th
100​
2700​
Yes - LIFO
400​

Total = 0 - 700 + 100 + 0 + 400 = - 200

Therefore you can only offset a loss of 200 against CompE, not 340.

If you buy more shares in CompA within four weeks of Aug 5th, then you can offset its loss of 70 if you eventually sell those new shares in CompA with a gain.

Since four weeks have already passed since you sold CompC, its loss of 70 is not offsetable at all.
 
Last edited:
Moolahasker said:
Also - the name bed and breakfast sort of implies you would Sell shares (with a gain) one evening and rebuy them the next day, in order to re-base the capital gain. Does the disposal and repurchase have to be on different days, or can I sell and buy on the same date?
Click to expand...
If you sell shares with a gain it doesn't matter when you rebuy them as gains are always realised. That includes rebuying on the same day.
 
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