Capital Gain/Loss Calculation

[mp_view]

I sold some shares last year making a capital gain of approx €2,000. However, I am carrying forward losses from previous years of approx €5,000. Can someone advise which is the correct method for calculating the loss I can carry forward to next year:

Method A:
Capital Gain €2,000
Less Annual Exemption -€1,270
730
Less Previous Losses -€5,000
Losses Carried Forward (€4,270)

Method B:
Capital Gain €2,000
Less Previous Losses -€5,000
Losses Carried Forward (€3,000)


Is there any revenue publication/leaflet which clearly shows how to calculate CGT liability and in particular how to calculate/handle losses which can be carried forward to future years? I have looked on revenue.ie but can't find anything.

 

[Clarkey]

I sold some shares last year making a capital gain of approx €2,000. However, I am carrying forward losses from previous years of approx €5,000. Can someone advise which is the correct method for calculating the loss I can carry forward to next year:

Method A:
Capital Gain €2,000
Less Annual Exemption -€1,270
730
Less Previous Losses -€5,000
Losses Carried Forward (€4,270)

Method B:
Capital Gain €2,000
Less Previous Losses -€5,000
Losses Carried Forward (€3,000)


Is there any revenue publication/leaflet which clearly shows how to calculate CGT liability and in particular how to calculate/handle losses which can be carried forward to future years? I have looked on revenue.ie but can't find anything.

Method B is correct. The personal exemption cannot be used to create or increase a loss so your losses forward available against future gains is €3,000.

 

[ClubMan]

Method B is correct. Previously incurred losses must be set against gains before your annual allowance. See chapter 5 point 2 here.

2. Personal exemption

The first €1,270 of an individual’s net gains (i.e. gains less losses, including losses brought forward from earlier years) are not chargeable.

Note that net gains are after previously incurred losses have been offset if applicable.

Post crossed with Clarkey's.

 

[mp_view]

Thanks for clarifying this.