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Wipe-out your CGT by offsetting losses by Amer Siddiq & Arthur Weller

Have you ever lost money on the stock market?

Have you made a capital loss on the sale of a property in the past?

Well, if the answer to either of the above questions is yes, and you have not registered these losses with the Inland Revenue, then register them with the Inland Revenue now.


Well you could significantly reduce any future property capital gains tax liability, or you could even wipe it out.

The fact of the matter is that if you have made losses on previous ‘qualifying’ assets, then you can register these losses with the Inland Revenue and offset these against any future capital gains.

Examples of ‘qualifying’ assets include:

- property (e.g., you have a number of residential investment properties);

- shares in a company (e.g., you have shares in LloydsTSB Bank);

- units in a unit trust.

However, if you are unable to or you forget to register your losses, you can still claim these losses up to five years after the tax return detailing the losses was due.

Case Study
Louise buys £20,000 of shares in Marconi at the height of the technology boom in May 2000. Unfortunately, the share price crumbles, and she ends up selling the shares 12 months later for a total value of £200.

This means that she has made a loss of £19,800.

She is unaware that she can register this loss with the Inland Revenue so that it can be offset against any future capital gain.

Had she known, she would have registered this loss in her 2001–2002 tax return.

After her misfortunes in the stock market, Louise decides to focus on property instead and buys an apartment in Birmingham in June 2001 for £120,000. She decides to sell it in June 2004 for £170,000. This gives her a capital gain of £50,000.

She takes tax advice and is told by her advisor that she is still able to register her losses with the Inland Revenue. In fact, as long as she registers the losses with the Inland Revenue by January 2007, they can be offset against any futurecapital gain.

This means that she can reduce her taxable gain on the sale of the property by £19,800 immediately.

So as you have just seen demonstrated by this case study, if you have any qualifying losses then register them now as you could save yourself a small fortune in property tax!

About Arthur Weller

Arthur Weller is a Chartered Tax Advisor (CTA) and an integral part of the Property Tax Portal team. He offers a special rate tax advisory service on any aspect of UK taxation, including property taxation, for as little as £87 for a 30 minute telephone tax consultation.

To learn  more about this service click here.