CGT advice

[llynaj]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?
I am aware that any CGT on property sold has to be paid within 30 days.
2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.
Thank you

[Dod101]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?
I am aware that any CGT on property sold has to be paid within 30 days.
2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.
Thank you

The simple answer is that if you are set on using an accountant for this matter, why do you not just go through the situation with him and let him advise you?

Dod

[Watis]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?
I am aware that any CGT on property sold has to be paid within 30 days.
2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.
Thank you

The simple answer is that if you are set on using an accountant for this matter, why do you not just go through the situation with him and let him advise you?

Dod

A fair point Dod, but, on reflection, some advice from the Board's CGT experts will assist the OP with their discussions with the accountant. They will be prepared and able to answer at least some of the accountant's questions and perhaps save time (and fees) at the end of the day.

Watis

[Lootman]

Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?

Realised losses can be used to offset gains in the current year either by taking them in the same current year, or else taking them in a prior year and carrying them forward.

If you intend to use losses from prior years to offset gains in this year, then you should have annotated those losses in your tax return for each year that they were realised. If you failed to do that then you would need to find a way of retrospectively recording those losses so that they can be used now to offset your gain.

An obvious method would be to amend your prior years' tax returns to include those losses. What I don't know is how many years HMRC lets you can go back and amend your return.

In those prior years were there also gains that were not reported, perhaps because they did not exceed the annual CGT-free allowance? If so then the value of those unreported gains would reduce the value of the unreported losses. And possibly eradicate them.

[bluedonkey]

CGT on sale of UK residential property has to be paid and CGT return submitted within 60 days of date of completion (not exchange).

You only need to realise enough share losses in to bring the BTL gain down to the CGT annual exemption. This is £12,300 in the year ending 5 April 2022.

The gain on the sale of the BTL property falls into the tax year in which the property is exchanged (not completion). The loss on the sale of shares falls into the tax year of the contract date, not the settlement date.

Any more than this needs to be dealt with by your accountant.

[Alaric]

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?

Caoital Gais tax is levied on the net proceeds of gains and losses in the tax year. So yes, unrealised losses have to be realised. How that interacts with the rules for paying tax on property sales is one to discuss with the accountant.

There are also rules allowing losses to be carried forward from previous years.

[fisher]

Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?

Realised losses can be used to offset gains in the current year either by taking them in the same current year, or else taking them in a prior year and carrying them forward.

If you intend to use losses from prior years to offset gains in this year, then you should have annotated those losses in your tax return for each year that they were realised. If you failed to do that then you would need to find a way of retrospectively recording those losses so that they can be used now to offset your gain.

An obvious method would be to amend your prior years' tax returns to include those losses. What I don't know is how many years HMRC lets you can go back and amend your return.

In those prior years were there also gains that were not reported, perhaps because they did not exceed the annual CGT-free allowance? If so then the value of those unreported gains would reduce the value of the unreported losses. And possibly eradicate them.

According to this link: https://www.gov.uk/capital-gains-tax/losses

"You do not have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset."

[llynaj]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?
I am aware that any CGT on property sold has to be paid within 30 days.
2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.
Thank you

The simple answer is that if you are set on using an accountant for this matter, why do you not just go through the situation with him and let him advise you?

Is part of the rationale of those boards not to provide advice? For the smart and well educated to share their knowledge and expertise with those of us less well informed. I fail to understand why you bothered to reply to my post.
Best wishes

[Dod101]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?
I am aware that any CGT on property sold has to be paid within 30 days.
2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.
Thank you

The simple answer is that if you are set on using an accountant for this matter, why do you not just go through the situation with him and let him advise you?

Is part of the rationale of those boards not to provide advice? For the smart and well educated to share their knowledge and expertise with those of us less well informed. I fail to understand why you bothered to reply to my post.
Best wishes

I plead guilty to 'bothering to reply to your post'. I hope you get what you are looking for here but I also hope you may be a bit more open minded about any advice (or not) that you do get.

Dod

[llynaj]

CGT on sale of UK residential property has to be paid and CGT return submitted within 60 days of date of completion (not exchange).

You only need to realise enough share losses in to bring the BTL gain down to the CGT annual exemption. This is £12,300 in the year ending 5 April 2022.

The gain on the sale of the BTL property falls into the tax year in which the property is exchanged (not completion). The loss on the sale of shares falls into the tax year of the contract date, not the settlement date.

Any more than this needs to be dealt with by your accountant.

Very helpful
Thank you

[llynaj]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?
I am aware that any CGT on property sold has to be paid within 30 days.
2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.
Thank you

The simple answer is that if you are set on using an accountant for this matter, why do you not just go through the situation with him and let him advise you?

Dod

A fair point Dod, but, on reflection, some advice from the Board's CGT experts will assist the OP with their discussions with the accountant. They will be prepared and able to answer at least some of the accountant's questions and perhaps save time (and fees) at the end of the day.

Watis

Thanks replies have reinforced and clarified my thoughts.

[Gengulphus]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?

Realising the losses on the shares in a later tax year than the gain on the property is the most straightforward situation: the losses cannot be used against the gain. (So a succinct-but-not-very-useful answer to your question is "Yes"...)

Realising the losses on the shares in the same tax year as the gain on the property is almost as straightforward: the losses on the shares are offset against (i.e. subtracted from) the same-year gain on the property (plus any other gains you've realised in the tax year) before CGT is calculated on the remaining gains (*). If you had more realised losses than realised gains in that tax year, that would only reduce them to zero, and you would be able to carry the remaining losses forward into future tax years

Realising the losses on the shares in an earlier tax year than the gain on the property gets complicated. The basic situation for one tax year earlier is that the losses realised in that earlier tax year must be offset against gains realised in that earlier tax year - even if those gains were below the year's CGT allowance. If (and only if) there were more losses than gains realised in that tax year, the remaining losses could be carried forward and offset against the gain on the property.

If the losses on the shares were realised two tax years before the gain on the property, the situation for the first of those tax years is the same - but if it allows you to carry the loss forward, that only means carrying it forward one year, i.e. to the second of those tax years. You then have the following three figures for that tax year: G = gains realised in that tax year, L = losses realised in that tax year, B = losses brought forward from the first tax year to that tax year. The rules are then (a) you must offset L against G, all the way until G=0 if necessary - so you might add more losses being carried forward if L > G, but not otherwise; (b) if the remaining gains are more than the CGT allowance for that tax year, you must offset B against G, but only to the point that either B is entirely used up or the remaining gains are reduced to that CGT allowance, whichever happens first. After that, you may end up with no, fewer, the same amount of or more losses being carried forward from that tax year to be offset against the gain on the property.

If the losses on the shares were realised three or more tax years before the gain on the property, the situation for the first of those tax years is again as described in the second preceding paragraph. If it causes losses to be carried forward, they go to the second of those tax years, where they are handled as in the last paragraph. That may result in no, fewer, the same amount or more losses being carried forward into the third of those tax years, where they are handled similarly - and so on until they might end up being carried forward from the last of those tax years into the tax year in which you realise the gain on the property.

A messy process which gets messier the more tax years are involved!

To add a bit more mess:

* Losses must be claimed in the tax year in which they were realised or the four following tax years - if you leave it longer than that, you can never claim or use them (with an exception for some very old losses (roughly last century) realised before this rule was introduced). The tax year in which they were realised is either the tax year in which you ceased to own them (typically by selling them, but it can also happen if the company goes bust, goes through liquidation and is finally dissolved, so that the shares no longer exist), or the date that you validly name in a negligible value claim about them - when a negligible value claim is possible, that often gives options to take a bit of mess out of the process. For example, you mention Crawshaw Group, which looks (inexpert opinion!) to have become of negligible value in the 2019/2020 tax year. If you sell the property in the current 2021/2022 tax year, you could make a negligible value claim on the basis of it having become of negligible value by any later date in the 2019/2020 tax year, or any date in the 2020/2021 or 2021/2022 tax years - and you'd do well to choose a date in the 2021/2022 tax year to make the loss on the Crawshaw shares and the gain on the property be (deemed to be) realised in the same tax year. (Note that Crawshaw Group plc still exists as a company and so its shares still exist - see https://find-and-update.company-informa ... y/04755803. They're valueless - but nothing will have caused someone other than you to own your shares, and you'll very likely continue to own them until the company is finally dissolved. It can take a many years for a company to move from "Liquidation" to "Dissolved", but that's not to be relied upon - it basically depends how much of a mess the liquidators need to disentangle.)

* For losses realised in the current tax year (2021/2022), you straightforwardly claim the loss in the tax return when it becomes time to submit the tax return for that year. There is the issue of CGT on the property sale being payable within 30 days, while the tax return concerned can typically only be submitted quite a lot later than that - I'm afraid all I know about that situation is what I've read in viewtopic.php?f=49&t=31274.

* For losses realised last tax year (2020/2021), you either claim the loss in the tax return for that tax year (if you haven't yet submitted it) or you 'amend' that tax return (if you have). Amending a tax return is a straightforward process which you can do off your own bat using the online tax return system (with a few exceptions - the one I remember is that you cannot do it if HMRC have already launched an enquiry into your tax return).

* For losses realised in the tax year before that (2019/2020), you amend your tax return for that tax year. That continues to work until January 31st, 2022 - after that, you have to ask HMRC to 'correct' the tax return, which involves you telling them what corrections need making and leaving them to make them. This might lead them to take a closer look at the tax return and whether it was strictly speaking correct - e.g. if you originally detailed your CGT gains and losses for the tax year and left the loss concerned out, then your declaration that the return was "complete and correct to the best of your knowledge and belief" needs a bit of explaining; on the other hand, if you didn't detail your CGT gains and losses because you didn't realise that you wanted to claim losses and none of the reasons for having to detail them applied, "I didn't realise I wanted to detail the losses" should be an adequate explanation.

* For losses realised in the two tax years before that (2017/2018 and 2018/2019), you'll need to ask HMRC to 'correct' the tax return.

* Losses realised in earlier tax years than that (2016/2017 and earlier) are out of time for claiming them: either they've already been entered into the relevant years' tax returns and are in the system, or they're no longer either claimable or usable.

2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.

Impossible to say how straightforward it is without a lot more detail, I'm afraid - dates, how committed you are to the property sale, details of all the shares you have already sold, of all those you still own and can sell, of all those you still own and cannot sell but can make a negligible value claim about, what if anything has appeared about capital gains and losses in your past tax returns, etc.

This almost certainly makes the accountant a good idea!

Gengulphus

[bluedonkey]

There was an error in my reply. I read the OP to say the BTL had a gain of £90k and the shares a loss of £90k. Of course, this is not the case. The BTL has a gain of say £365k and the shares have a loss of £90k, so even a disposal of all the shares mentioned will not eliminate the BTL gain, contrary to what I said in my post.

[Lootman]

A messy process which gets messier the more tax years are involved!

Indeed. Not only is there all the effort involved in keeping track of and documenting all this, but carrying forward losses from prior years also means that you have effectively given up your annual CGT-free allowance for those tax years.

Now there could be a situation where most or all of your open positions are showing a loss and so, if you decide to sell any of them, then you will have net losses. And given that, it is better to carry them forward than write them off.

But I would imagine that for anyone who has been investing for a few years, there are always unrealised gains that can be taken to use up the annual CGT-free allowance. So to fail to use that allowance just for the privilege of carrying forward some losses seems wrong-headed to me.

As a rule I sell off any losing position before the end of each tax year, and use those losses to offset my realised gains for the year. Effectively that increases my annual CGT-free allowance by the amount of the losses. And then there is no need to record or remember anything from one year to the next.

That said I haven't had a taxable position showing a loss for several years now, such has been the progress of the markets and the power of time in the market.

[llynaj]

First please excuse my naivety in asking those questions. I am now faced with a huge CGT bill upon the sale of a flat which makes up a large part of my pension. Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.

I am in the position of owning a Buy to Let property valued at approximately £400K, having purchased in 1990 for £35K. I estimate an approximate CGT liability of £90K.

I own shares in the former Royal Bank of Scotland now Natwest Group PLC. I purchased some £54K of shares when the Bank seemed too big to fail. Those are now valued at some £4K. I have other shares in my portfolio which if sold would cumulatively total £90K of losses.

My questions are
1 Do I have to crystallise my loss in shares before, or, in the same tax year as I sell my flat?

Realising the losses on the shares in a later tax year than the gain on the property is the most straightforward situation: the losses cannot be used against the gain. (So a succinct-but-not-very-useful answer to your question is "Yes"...)

Realising the losses on the shares in the same tax year as the gain on the property is almost as straightforward: the losses on the shares are offset against (i.e. subtracted from) the same-year gain on the property (plus any other gains you've realised in the tax year) before CGT is calculated on the remaining gains (*). If you had more realised losses than realised gains in that tax year, that would only reduce them to zero, and you would be able to carry the remaining losses forward into future tax years

Realising the losses on the shares in an earlier tax year than the gain on the property gets complicated. The basic situation for one tax year earlier is that the losses realised in that earlier tax year must be offset against gains realised in that earlier tax year - even if those gains were below the year's CGT allowance. If (and only if) there were more losses than gains realised in that tax year, the remaining losses could be carried forward and offset against the gain on the property.

If the losses on the shares were realised two tax years before the gain on the property, the situation for the first of those tax years is the same - but if it allows you to carry the loss forward, that only means carrying it forward one year, i.e. to the second of those tax years. You then have the following three figures for that tax year: G = gains realised in that tax year, L = losses realised in that tax year, B = losses brought forward from the first tax year to that tax year. The rules are then (a) you must offset L against G, all the way until G=0 if necessary - so you might add more losses being carried forward if L > G, but not otherwise; (b) if the remaining gains are more than the CGT allowance for that tax year, you must offset B against G, but only to the point that either B is entirely used up or the remaining gains are reduced to that CGT allowance, whichever happens first. After that, you may end up with no, fewer, the same amount of or more losses being carried forward from that tax year to be offset against the gain on the property.

If the losses on the shares were realised three or more tax years before the gain on the property, the situation for the first of those tax years is again as described in the second preceding paragraph. If it causes losses to be carried forward, they go to the second of those tax years, where they are handled as in the last paragraph. That may result in no, fewer, the same amount or more losses being carried forward into the third of those tax years, where they are handled similarly - and so on until they might end up being carried forward from the last of those tax years into the tax year in which you realise the gain on the property.

A messy process which gets messier the more tax years are involved!

To add a bit more mess:

* Losses must be claimed in the tax year in which they were realised or the four following tax years - if you leave it longer than that, you can never claim or use them (with an exception for some very old losses (roughly last century) realised before this rule was introduced). The tax year in which they were realised is either the tax year in which you ceased to own them (typically by selling them, but it can also happen if the company goes bust, goes through liquidation and is finally dissolved, so that the shares no longer exist), or the date that you validly name in a negligible value claim about them - when a negligible value claim is possible, that often gives options to take a bit of mess out of the process. For example, you mention Crawshaw Group, which looks (inexpert opinion!) to have become of negligible value in the 2019/2020 tax year. If you sell the property in the current 2021/2022 tax year, you could make a negligible value claim on the basis of it having become of negligible value by any later date in the 2019/2020 tax year, or any date in the 2020/2021 or 2021/2022 tax years - and you'd do well to choose a date in the 2021/2022 tax year to make the loss on the Crawshaw shares and the gain on the property be (deemed to be) realised in the same tax year. (Note that Crawshaw Group plc still exists as a company and so its shares still exist - see https://find-and-update.company-informa ... y/04755803. They're valueless - but nothing will have caused someone other than you to own your shares, and you'll very likely continue to own them until the company is finally dissolved. It can take a many years for a company to move from "Liquidation" to "Dissolved", but that's not to be relied upon - it basically depends how much of a mess the liquidators need to disentangle.)

* For losses realised in the current tax year (2021/2022), you straightforwardly claim the loss in the tax return when it becomes time to submit the tax return for that year. There is the issue of CGT on the property sale being payable within 30 days, while the tax return concerned can typically only be submitted quite a lot later than that - I'm afraid all I know about that situation is what I've read in viewtopic.php?f=49&t=31274.

* For losses realised last tax year (2020/2021), you either claim the loss in the tax return for that tax year (if you haven't yet submitted it) or you 'amend' that tax return (if you have). Amending a tax return is a straightforward process which you can do off your own bat using the online tax return system (with a few exceptions - the one I remember is that you cannot do it if HMRC have already launched an enquiry into your tax return).

* For losses realised in the tax year before that (2019/2020), you amend your tax return for that tax year. That continues to work until January 31st, 2022 - after that, you have to ask HMRC to 'correct' the tax return, which involves you telling them what corrections need making and leaving them to make them. This might lead them to take a closer look at the tax return and whether it was strictly speaking correct - e.g. if you originally detailed your CGT gains and losses for the tax year and left the loss concerned out, then your declaration that the return was "complete and correct to the best of your knowledge and belief" needs a bit of explaining; on the other hand, if you didn't detail your CGT gains and losses because you didn't realise that you wanted to claim losses and none of the reasons for having to detail them applied, "I didn't realise I wanted to detail the losses" should be an adequate explanation.

* For losses realised in the two tax years before that (2017/2018 and 2018/2019), you'll need to ask HMRC to 'correct' the tax return.

* Losses realised in earlier tax years than that (2016/2017 and earlier) are out of time for claiming them: either they've already been entered into the relevant years' tax returns and are in the system, or they're no longer either claimable or usable.

2 Is the scenario I present straight forward, or, are there pitfalls I need to be made aware of? Although I do not have an accountant, I would use an accountant for this matter.

Impossible to say how straightforward it is without a lot more detail, I'm afraid - dates, how committed you are to the property sale, details of all the shares you have already sold, of all those you still own and can sell, of all those you still own and cannot sell but can make a negligible value claim about, what if anything has appeared about capital gains and losses in your past tax returns, etc.

This almost certainly makes the accountant a good idea!

Gengulphus

I thank you for such an in depth and comprehensive reply to my post. It is quite humbling that people are so generous with their time to help others.

[Gengulphus]

A messy process which gets messier the more tax years are involved!

Indeed. Not only is there all the effort involved in keeping track of and documenting all this, but carrying forward losses from prior years also means that you have effectively given up your annual CGT-free allowance for those tax years.

Now there could be a situation where most or all of your open positions are showing a loss and so, if you decide to sell any of them, then you will have net losses. And given that, it is better to carry them forward than write them off.

But I would imagine that for anyone who has been investing for a few years, there are always unrealised gains that can be taken to use up the annual CGT-free allowance. So to fail to use that allowance just for the privilege of carrying forward some losses seems wrong-headed to me.

As a rule I sell off any losing position before the end of each tax year, and use those losses to offset my realised gains for the year. Effectively that increases my annual CGT-free allowance by the amount of the losses. And then there is no need to record or remember anything from one year to the next.

That said I haven't had a taxable position showing a loss for several years now, such has been the progress of the markets and the power of time in the market.

Agreed about that being a reasonable general policy for managing CGT on shares, but the OP isn't asking for such a policy! Instead, it's asking how to deal with a situation in which there have been some historical losses ("Although aware that i could offset share losses. I have never claimed a Capital loss or nil value claim. I now realise I should have. In that I have owned shares such as Crawshaw Group which now have nil value.") and in particular to make as many of those losses available as possible to offset against the gain on the flat.

To try to produce a somewhat more succinct summary for the OP of the implications of my previous reply, as regards losses that haven't been reported in past tax returns (*):

* If the OP actually realised losses by selling shares in a past tax year, then if that tax year is 5 or more tax years ago, the losses are completely unusable, so forget them. Otherwise, they need to check on all the gains and losses they realised in that tax year. If the total of the losses is less than or equal to the total of the gains, those losses have been completely used against those gains, so they don't get carried forward even once and certainly cannot be used to offset the gain on the flat - so again forget them. If the total of the losses is more than the total of the gains, the difference will be carried forward once - if that doesn't carry them forward into the tax year of the flat sale, they might or might not get carried forward through all the intervening tax years - that's where things can get messy...

* Otherwise, the OP hasn't intentionally ceased to own the shares. If the company still exists (even if its shares are worthless) and the OP still owns the shares (even though no longer reported on by the OP's broker), a negligible value claim claiming that they had become of negligible value by a date in the same tax year as the disposal of the flat will avoid the mess. In the case of Crawshaw, the company definitely still exists, and I cannot see any reason why ownership of the shares might have been transferred to anyone else (but don't rely on my ability to find all such reasons!), so I think this applies to Crawshaw. The OP's wording "shares such as Crawshaw Group which now have nil value" suggests there might well be other such shares.

* Otherwise, either ownership of the shares has been compulsorily transferred to someone else (rare, but it can happen - IIRC, that's what happened when the government nationalised Alliance & Leicester around 2008), or the company has been dissolved, so that it and its shares cease to exist. Those cases are treated as though the OP actually sold the shares on the date of the compulsory transfer or company dissolution, i.e. as in the first bullet point.

(*) For reassurance, I should emphasise this can happen entirely legitimately - not every tax return needs to be accompanied by detailed calculations of capital gains and losses.

Gengulphus

[eisman]

Gengulphus wrote:

Losses must be claimed in the tax year in which they were realised or the four following tax years - if you leave it longer than that, you can never claim or use them (with an exception for some very old losses (roughly last century) realised before this rule was introduced).

For completeness, the 'exception for very old losses' relates to excess(*) losses incurred in the tax years prior to 1996-97, when self-assessment commenced (i.e. losses incurred in 1995-96 or earlier). These losses did not have to be notified to the Inland Revenue (as it then was) until required to be used against a subsequent tax year's capital gain.

(*) 'Excess losses' means losses exceeding the amount of any capital gains of the same tax year (as also indicated by Gengulphus).

See:

https://www.gov.uk/hmrc-internal-manual ... re-1996-97

Eisman