CGT calculation and modified FIFO rules

gforce_24

Hi

Last December I sold a shareholding (approx 2500 shares) I had in ILP when they nose dived from over a euro to around 60 cents. A few days after that they were up to over 1 euro again, and I then bought back in with a smaller number of shares (approx 1000 shares). (This was well within the 4 week period relating to modified FIFO rules of share disposal.) I made a loss when I sold all my holding at the start of December.


Based on that sale, I have a few questions relating to handling the loss based on FIFO rules (as outlined in the "Guide to Capital Gains Tax", page 23 which can be found on the Revenue Commisioners website):
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1) In the FIFO rules description in the CGT Guide, can anyone explain to me what the words "identified with" in the following sentence means

"the shares sold are identifed with the shares acquired within that period"

How does that "identified with" phrase affect a shareholding and it's subsequent disposal?


2) In regard to the following sentences in that section of the CGT Guide FIFO rules

"Furthermore, where a loss accrues on the disposal of shares and shares of the same class are acquired within a four week period, the loss is not available for offset against any other gains arising. Instead the loss is only available for set off against any gain that might arise on the subsequent disposal of the shares so acquired in the four week period - this provision does not apply where there is a gain on the disposal."

I am wondering if I can either

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i. Use the balance of the loss (on the 1500 shares which I sold at the start of December), which I made between

(Sale of all holding in December 2010 - Purchase of small holding in December 2010)

or

ii. Does the loss which is mentioned relate to the entire 2500 share holding, meaning that I would not be able to use the loss on all 2500 shares until I sold the 1000 shares which I later bought back in with?

Sorry if this sounds a bit basic and/or confusing. I think that I should be able to use the loss on the remaining 1500 shares in 2010, but just want to see if anyone else has any further information on this.


(To finish the story, in the first few months of 2011 I purchased some more ILP shares and later in the year sold the entire holding.)


Thanks for any help & suggestions

Mr. Incognito

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