Minimizing capital gains tax liability

[noel 2006]

Earlier this year I sold some shares and made a capital gain. With the fall in equity markets I now have some unrealised loses in shares that I would like to keep. Can anyone advise as to whether it is legitimate for me to realise some loses to offset the gains and buy back the same shares?

 

[ClubMan]

I presume so if you do it before September 30th? See [broken link removed]:

Payment dates for disposals are as follows:

a) If the disposal is made in the period 1 January to 30 September the tax is due on 31 October in that tax year
b) If the disposal is made in the period 1 October to 31 December the tax is due on 31 January in the following year

Form CGT Payslip which is available under [broken link removed] may be used for remittance purposes.

I am not a tax expert though so get professional advice.

 

[capall]

If you sell and buyback shares within a 4 week period the loss is only available for offset against any future gain on those same shares

 

[ClubMan]

Ah - good point!

[broken link removed]

6. Disposal of shares within four weeks of acquisition

The FIFO rules are modified in any case where shares of the same class are bought and sold within a period of four weeks. Where shares are sold within four weeks of acquisition the shares sold are identified with the shares acquired within that period. Furthermore, where a loss accrues on the disposal of shares and shares of the same class are acquired within a four week period, the loss is not available for offset against any other gains arising and instead is only available for set off against any gain that might arise on the subsequent disposal of the shares so acquired in the four week period - this provision does not apply where there is a gain on the disposal.

 

[noel 2006]

Thanks Capall and Clubman for this information.

Noel.