Allowable losses to offset against ER gains

[lionheart79]

Hi all, currently in liquidation (sob) via MVL online (smooth sailing so far, thanks).

I have a few investments in my personal trading accounts (non-ISA) that have done terribly (don't ask me for investment tips!) and am wondering if I can realise these losses to offset against my (10% ER taxed) capital gains. These comprise:

• A stock listed on AIM (and which I'm embarrassed to say is 99.9% down meaning the trading cost to sell it will be more than the value realised!)
• A stock delisted from AIM in 2016 and effectively bust but is still trading insofar as it is lodging annual accounts with Companies House. I hope to claim on a 'negligible value' basis
• A Crowdcube investment which has entered administration (EIS relief claimed prior in 2016, so not sure if any loss relief is available)

These are not large sums of money but if can reduce the tax bill by even just a little bit, why not do it I feel.
Clearly I will be asking my accountant next tax year when I come to do my SA for 20/21, however we've wrapped for this year after closing my ltd.

thanks

[Lance]

Not sure I understand.
You pay CGT on money taken when you close the business. If you've lost money then you won't be taking that out so no CGT to pay. You can only take out retained profit and money lost to bad investments is not profit.

You should be able to offset those losses against CT, but it depends on the details.

So either you're not explaining yourself very well.... Or you are confusing something I cannot quite fathom.

[lionheart79]

Not sure I understand.
You pay CGT on money taken when you close the business. If you've lost money then you won't be taking that out so no CGT to pay. You can only take out retained profit and money lost to bad investments is not profit.

You should be able to offset those losses against CT, but it depends on the details.

So either you're not explaining yourself very well.... Or you are confusing something I cannot quite fathom.

Hi Lance. The liquidation will result in capital gains. The share losses are my personal assets - not the company's. So if I realise them this year they should offset some of the gains from closing the co.
Apologies if that wasn't clear.

[Lance]

Hi Lance. The liquidation will result in capital gains. The share losses are my personal assets - not the company's. So if I realise them this year they should offset some of the gains from closing the co.
Apologies if that wasn't clear.

ahh. yes.... Understood.

I believe, but check with your accountant, that you can.
Capital Gains Tax: If you make a loss - GOV.UK

If you have £20k gain from the business, and a £10k loss from the investments, you have a £10k net gain, and that is below the threshold for the year. So no CGT to pay.

How that works with ER is a different question as ER won't apply for all your investments. Whoever does your MVL should handle it for you in any case.