Recognising capital losses

Mar 10, 2023

The annual capital gains exemption (currently £12,300) may cover most of the capital gains that you make on your share portfolio. However, that exemption will be cut to £6,000 on 6 April 2023 and £3,000 in April 2024.

If you are planning to make large capital gains in the future, you may be able to supplement your annual capital gains exemption with capital losses brought forward from earlier tax years.

To do this you must first claim the capital loss, either on your tax return for the year in which the loss arose or as a separate claim made within four years of the end of the tax year of the loss. For example, any capital losses made in 2018-19 must be claimed by 5 April 2023.

You may have potential capital losses from holding cryptocurrencies following the crypto market crash in November 2022 or you may hold shares which now have little or no value. If those assets still exist, you may wish to make a negligible value claim to create a capital loss in this tax year. Where the company in which you hold shares has already been dissolved a capital loss will have crystallised in respect of those shares on dissolution.

We can help you make the necessary capital loss claims.

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