Tax, can I get a rebate on a consolidated loss on the stock market?
Discussion
So I have a number of shares in an aim listed oil exploration company that has not done too well. This would result in a quite heavy loss if I were to sell today. However, if I did sell and consolidate this loss, would I be able to get any tax back against my other earnings ie salery or rental income from property?
If so, would it make sense to consolidate the loss and then buy back using a stocks and shares isa? (Now that you can with aim stocks!) That way if the stock does ever go back up it would be tax free?
If so, would it make sense to consolidate the loss and then buy back using a stocks and shares isa? (Now that you can with aim stocks!) That way if the stock does ever go back up it would be tax free?
Carlos Harper said:
So I have a number of shares in an aim listed oil exploration company that has not done too well. This would result in a quite heavy loss if I were to sell today. However, if I did sell and consolidate this loss, would I be able to get any tax back against my other earnings ie salery or rental income from property?
If so, would it make sense to consolidate the loss and then buy back using a stocks and shares isa? (Now that you can with aim stocks!) That way if the stock does ever go back up it would be tax free?
I'll leave the tax bit to someone else.If so, would it make sense to consolidate the loss and then buy back using a stocks and shares isa? (Now that you can with aim stocks!) That way if the stock does ever go back up it would be tax free?
On your second point this may work in theory but you need to consider the spread and liquidity when 'bedding' into an ISA, could find that you take a big hit on the spread or get hammered on screen size if shares are out of favour.
I'm no accountant, but don't you pay capital gains tax on shares when you sell?
In which case you could offset a loss in a tax year against a captial gain elsewhere.
E.g. you could sell a second home or buy to let property (or some shares that have performed well) thats increased in value and use that gain to offset the shares loss.
http://www.hmrc.gov.uk/cgt/shares/
I have only a basic grasp so ignore me.... ask an accountant....
In which case you could offset a loss in a tax year against a captial gain elsewhere.
E.g. you could sell a second home or buy to let property (or some shares that have performed well) thats increased in value and use that gain to offset the shares loss.
http://www.hmrc.gov.uk/cgt/shares/
I have only a basic grasp so ignore me.... ask an accountant....
Carlos Harper said:
So I have a number of shares in an aim listed oil exploration company that has not done too well. This would result in a quite heavy loss if I were to sell today. However, if I did sell and consolidate this loss, would I be able to get any tax back against my other earnings ie salery or rental income from property?
If so, would it make sense to consolidate the loss and then buy back using a stocks and shares isa? (Now that you can with aim stocks!) That way if the stock does ever go back up it would be tax free?
Salary - NoIf so, would it make sense to consolidate the loss and then buy back using a stocks and shares isa? (Now that you can with aim stocks!) That way if the stock does ever go back up it would be tax free?
Rental income - No, it's a form of income therefore it could not be offset - were you to sell the property at a profit you could offset your losses against capital gains tax.
Consolidating the loss by buying back in ISA - You would need to sell then wait 30 days due to bed and breakfast rules, shares bought or sold within a 30 day time period are deemed not to have been sold at all. If you were to sell and move to ISA then this would not matter as any future gains would be protected against capital gains tax. A buyback within this 30 day period would not officially count as a loss for any other tax purpose though.
ERIC!Thanks for the help all. Fundamentally it seems the only off set would be against a capital gains profit. So I may as well wait before starting the Isa till I have profit elsewhere. If in the meantime my oiler stock does go back up I don't need to worry about starting the isa until I hit break even.
Why on earth would you sell now and move the shares at a big loss into an ISA?
Surely it would make sense, if holding the stock, to wait until a small profit, within CGT allowance, then move it into the ISA.
Otherwise you've got a big loss without any advantage unless you've got other gains to offset it against and have had no real advantage from the ISA, as the gains made would either be a recouping of the loss made thus far or within the nil rate allowance.
Surely it would make sense, if holding the stock, to wait until a small profit, within CGT allowance, then move it into the ISA.
Otherwise you've got a big loss without any advantage unless you've got other gains to offset it against and have had no real advantage from the ISA, as the gains made would either be a recouping of the loss made thus far or within the nil rate allowance.
ellroy said:
Why on earth would you sell now and move the shares at a big loss into an ISA?
Surely it would make sense, if holding the stock, to wait until a small profit, within CGT allowance, then move it into the ISA.
Otherwise you've got a big loss without any advantage unless you've got other gains to offset it against and have had no real advantage from the ISA, as the gains made would either be a recouping of the loss made thus far or within the nil rate allowance.
All to do with the tax - if you can offset the loss against tax that you would pay on your earnings then the loss is greatly reduced. You then buy back the shares from within your ISA (at theoretically the same price you sold them for) so that if and when they increase in value, any profit on this is tax free (because it's an ISA).Surely it would make sense, if holding the stock, to wait until a small profit, within CGT allowance, then move it into the ISA.
Otherwise you've got a big loss without any advantage unless you've got other gains to offset it against and have had no real advantage from the ISA, as the gains made would either be a recouping of the loss made thus far or within the nil rate allowance.
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