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Capital Losses

Practical Issues
Fluke
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Capital Losses

#231810

Postby Fluke » June 24th, 2019, 6:57 pm

Hi folks,

Just doing my self assessment, I recorded a capital loss last year which may or may not ever be used to offset against a future gain. My question is do capital losses have to be carried forward each tax year on the return, or are they just recorded the once and that's it?

Thanks.

Charlottesquare
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Re: Capital Losses

#231830

Postby Charlottesquare » June 24th, 2019, 8:06 pm

Fluke wrote:Hi folks,

Just doing my self assessment, I recorded a capital loss last year which may or may not ever be used to offset against a future gain. My question is do capital losses have to be carried forward each tax year on the return, or are they just recorded the once and that's it?

Thanks.


Only the once, however it can be useful each year to record a white box note re unused b/fwd losses if capital gains pages are not needed every year, avoids them becoming lost and forgotten over time.

My software (Taxcalc) does this for me

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Re: Capital Losses

#231854

Postby Fluke » June 24th, 2019, 11:18 pm

Charlottesquare wrote:
Fluke wrote:Hi folks,

Just doing my self assessment, I recorded a capital loss last year which may or may not ever be used to offset against a future gain. My question is do capital losses have to be carried forward each tax year on the return, or are they just recorded the once and that's it?

Thanks.


Only the once, however it can be useful each year to record a white box note re unused b/fwd losses if capital gains pages are not needed every year, avoids them becoming lost and forgotten over time.

My software (Taxcalc) does this for me


That's a good idea Chalottesquare, no I don't have any need for the capital gains pages this year so I'll just use the additional info box as you suggest. Very helpful, thanks.

langley59
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Re: Capital Losses

#262848

Postby langley59 » November 7th, 2019, 6:35 pm

Further to this I have reported capital losses to be carried forward on my self assessment in previous years. I am now in the situation where I am thinking of selling assets this tax year which will generate capital gains in excess of this year's CGT allowance. My question is...is it possible to verify that the losses declared in previous years have been accepted by HMRC and are available to me before I blow this year's allowance? I never received any acknowledgement of the losses declared at the time and I can see nothing in my online account which shows these losses.

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Re: Capital Losses

#262850

Postby PinkDalek » November 7th, 2019, 6:38 pm

langley59 wrote:[My question is...is it possible to verify that the losses declared in previous years have been accepted by HMRC and are available to me before I blow this year's allowance? I never received any acknowledgement of the losses declared at the time and I can see nothing in my online account which shows these losses.


No, I don't believe so until you actually attempt to utilise the capital losses brought forward.

Unless anyone knows differently.

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Re: Capital Losses

#262998

Postby Gersemi » November 8th, 2019, 12:51 pm

langley59 wrote: My question is...is it possible to verify that the losses declared in previous years have been accepted by HMRC and are available to me before I blow this year's allowance? I never received any acknowledgement of the losses declared at the time and I can see nothing in my online account which shows these losses.


If you have shown these on your tax return and HMRC haven't opened an enquiry into it within the time limit, then they have been 'accepted'. I guess the real question is have they kept a record of the unused losses? I suppose the only way to be sure is to contact them and ask.

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Re: Capital Losses

#263015

Postby PinkDalek » November 8th, 2019, 2:24 pm

Gersemi wrote:If you have shown these on your tax return and HMRC haven't opened an enquiry into it within the time limit, then they have been 'accepted'.


In the old days Capital Losses weren't determined until utilised (in most situations).

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg21500#special-rules-for-losses-arising-before-1996-1997 does appear to support what you've said though, in that the comments under that sub-heading Special rules for losses arising before 1996-1997 no longer appear to apply (other than the order of set-off). They commence with For years before the introduction of Self Assessment there was no statutory mechanism for agreeing or litigating the amount of capital losses in the absence of gains for them to be set against, ....

I guess the real question is have they kept a record of the unused losses? I suppose the only way to be sure is to contact them and ask.


In langley59's case the capital losses to be carried forward were on his/her self assessment in previous years. Isn't the record therefore prior Tax Returns.

In our (not mine) situation we have continued, year in, year out, to complete the relevant parts of https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787346/sa108_2019.pdf
including the heading 2018-19 capital losses - other information Losses available to be carried forward. Despite not always, in some years, having to complete Capital gains summary pages at all. In such a way that the latest Tax Return is up to date on that front.

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Re: Capital Losses

#263021

Postby JonE » November 8th, 2019, 2:42 pm

Gersemi wrote:
langley59 wrote: My question is...is it possible to verify that the losses declared in previous years have been accepted by HMRC and are available to me before I blow this year's allowance? I never received any acknowledgement of the losses declared at the time and I can see nothing in my online account which shows these losses.


If you have shown these on your tax return and HMRC haven't opened an enquiry into it within the time limit, then they have been 'accepted'.

Is there a time limit for individuals? I can no longer find a link I used to have to the old manual which I recollect as saying that, for individuals, losses claimed and carried forward should be noted without comment because it is only necessary for HMRC to look into whether to accept or reject claimed losses if/when an attempt is made to actually use them. Wording was along the lines that it made no difference to the tax assessable in the year under review so consideration of validity was to be deferred until it did. Ring a bell with anyone?

[Edit: Ooops! Didn't see PD's post before eventually submitting this after fruitless search for relevant page in old manual]

Cheers!
Last edited by JonE on November 8th, 2019, 2:46 pm, edited 1 time in total.

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Re: Capital Losses

#263022

Postby PinkDalek » November 8th, 2019, 2:46 pm

JonE wrote:Ring a bell with anyone?


Yes, see the reply immediately preceding yours!

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Re: Capital Losses

#263042

Postby Bouleversee » November 8th, 2019, 4:40 pm

langley59 wrote:Further to this I have reported capital losses to be carried forward on my self assessment in previous years. I am now in the situation where I am thinking of selling assets this tax year which will generate capital gains in excess of this year's CGT allowance. My question is...is it possible to verify that the losses declared in previous years have been accepted by HMRC and are available to me before I blow this year's allowance? I never received any acknowledgement of the losses declared at the time and I can see nothing in my online account which shows these losses.


What do you mean by "before I blow this year's allowance"? I think I am right in saying that you will have to use it before making use of any losses c/f and you can't c/f any unused gains allowance. I am pretty sure that I have a letter agreeing losses up to a certain date, before I started doing returns on-line. Perhaps you meant before you exceed the current year's allowance.

I really must start doing my return for last year. I shall do doubt have lots of queries myself.

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Re: Capital Losses

#263048

Postby langley59 » November 8th, 2019, 4:54 pm

Bouleversee wrote:What do you mean by "before I blow this year's allowance"? Perhaps you meant before you exceed the current year's allowance.
Yes that's right. I could have phrased it better. I wouldn't be happy with myself if I exceeded this year's allowance thinking that I had losses brought forward to offset any excess gain only to find out that HMRC do not recognise/accept the losses I reported in prior years. I could call them to enquire but I am reluctant to draw attention to myself.

Thanks all for the replies.

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Re: Capital Losses

#263152

Postby mutantpoodle » November 9th, 2019, 8:52 am

if you declared the losses within the allowed time period following the actual loss...and assuming that you have a record of your tax return you shouldnt have any problems...I never have
hmrc might.... if you unlucky..be unable to find your establishment of the loss...but you will be able to assist with your copy!

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Re: Capital Losses

#263346

Postby PinkDalek » November 10th, 2019, 2:13 pm

mutantpoodle wrote:if you declared the losses within the allowed time period following the actual loss...and assuming that you have a record of your tax return you shouldnt have any problems...I never have


This being Self Assessment doesn’t mean anyone at HMRC has actually looked at your Tax Returns at all. The fact that you have never had a problem doesn’t mean that others don’t!

The figures are merely captured from hard copy returns or processed via the online returns. HMRC then make it clear they can check what you have included during the time period available to them.

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Re: Capital Losses

#263362

Postby mutantpoodle » November 10th, 2019, 4:16 pm

indeed.

checked within the time period (looked at or not) they say...ie 12 months from date of submission

whilst i dont know what would happen BEYOND that time period...they do suggest that the return is agreed if not queried within the 12 months
I imagne that if they find issues with 'this years' return they reserve the right to go back further...??

perhaps wrongly...but I am taking that as acceptable and defined.

I havent had any questioned...and hopefully other woud not either.........same applies to paper returns

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Re: Capital Losses

#263371

Postby PinkDalek » November 10th, 2019, 5:37 pm

mutantpoodle wrote:[checked within the time period (looked at or not) they say...ie 12 months from date of submission


Yes for standard enquiries, as long as the date of submission was timely in itself.

whilst i dont know what would happen BEYOND that time period...they do suggest that the return is agreed if not queried within the 12 months
I imagne that if they find issues with 'this years' return they reserve the right to go back further...??


https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch56100 may be worth a read if one has concerns on that front.

It includes:

“Discovery” assessment (or amendment of partnership statement) where loss of tax due to deliberate behaviour of person or agent.

Time Limit: 20 years from the end of the year of assessment.


An easier to follow randomly found article is here https://www.uhy-uk.com/resources-publications/tax-hub/tax-blog/how-long-are-your-tax-returns-open-to-an-hmrc-enquiry/.

Not that I'm suggesting such a situation would apply to you or to langley59!


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