Loss on Irish Bank Shares & Future CGT

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dublinwoman72

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I am just trying to understand how previous capital losses on shares can be offset against future capital gains on shares for CGT purposes. For example, say Peter has €10,000 of capital losses from Irish bank shares sold from the 2008 crash. He then buys €10,000 worth of shares. These go up in value to €40,000 and he sells them. So he has made a gain of €30,000, and approximately €10,000 is due in CGT at 33%. Does this mean he has no liability for CGT, Or does it mean that- first €10,000 of the gain is disregarded, and thus at 33% is due on the remaining €20,000 ie roughly €6600? Thank you in advance for any help. I’m trying to understand how capital losses losses can be offset again future capital gains
 
The past loss must be an actual loss, as in you must have sold the bank shares previously, and made a loss.

Those losses can be carried forward, and offset against a future capital gain.

This reduces the taxable gain.
 
Ok so the realised capital loss is offset against the gross capital gain, not against the actual tax due ? So it doesn’t 100 per cent erase the past loss in the worked example, just reduces it by one-third if you like?
 
dublinwoman72 said:
Ok so the realised capital loss is offset against the gross capital gain, not against the actual tax due ? So it doesn’t 100 per cent erase the past loss in the worked example, just reduces it by one-third if you like?
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It does!

A €100 loss cancels-out a €100 gain.

The tax on a €100 gain is €33. It would hardly make sense for a €33 loss to cancel-out the €33 tax on a €100 gain!
 
Long day !!! Ok so historical realised share loss of €10 k on disposal. Future share purchase €10k , sold at €40k, gain €30k, hence CGT tax liability €10k but net liability to Revenue €0k due to previous €10 K historical loss?
 
dublinwoman72 said:
Long day !!! Ok so historical realised share loss of €10 k on disposal. Future share purchase €10k , sold at €40k, gain €30k, hence CGT tax liability €10k but net liability to Revenue €0k due to previous €10 K historical loss?
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No!

€30k gain now minus €10k loss in the past equals €20k taxable gain and €6.7k tax or thereabouts (ignoring annual allowances etc).
 
Protocol said:
The past loss must be an actual loss, as in you must have sold the bank shares previously, and made a loss.

Those losses can be carried forward, and offset against a future capital gain.

This reduces the taxable gain.
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Anglo shares (still held) cannot be sold and were deemed worthless in 2020. Actually, the determination of worth may have been challenged.
 
dublinwoman72 said:
Ok so the realised capital loss is offset against the gross capital gain, not against the actual tax due ? So it doesn’t 100 per cent erase the past loss in the worked example, just reduces it by one-third if you like?
Click to expand...
€10k of loss reduces €10k of gains.
 
A table might help you to get your head around it.

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