Making Unprompted qualifying disclosure

pliauskiux

Hi guys.

I've been investing into crypto currencies over the past few years, making a loss each year. I haven't submitted CGT report to revenue yet, and looking at it now it seems that I need to make a Unprompted qualifying disclosure.

I'm using software right now that calculates losses/gains, and generates complete tax reports, capital gains reports etc, so going forward paying the CGT should not be a problem, I'm just having trouble understanding what's involved in making the disclosure.

Revenue website has a 100 page pdf with a lot of information https://www.revenue.ie/en/self-assessment-and-self-employment/making-a-disclosure/what-is-a-qualifying-disclosure.aspx most of which doesn't seem to be relevant to my situation.

Q1. How does one go about making the disclosure for those last couple of years if no gains were made? What forms should I complete?

Q2. Should I hire an accountant to do this for me, even if I have complete tax reports generated?

Any help is appreciated.

Thanks in advance.

Calahonda52

I don't see any need for an accountant when its losses.
How do you file the rest of your tax returns?
How many years back is it?
can you just do it as a refiling of your annual return if within the last 4 years?

I think you are overthinking it, especially with losses.

pliauskiux

Calahonda52 wrote: »

I don't see any need for an accountant when its losses.
How do you file the rest of your tax returns?
How many years back is it?
can you just do it as a refiling of your annual return if within the last 4 years?

I think you are overthinking it, especially with losses.

Thanks for your reply. It's 3 years. I don't file any tax returns myself, as I work for a company full time and they take care of it.

y0ssar1an22

You must file by 31 October in the year after the date of disposal. You must do this even if no tax is due because of reliefs or allowable losses.

you need to declare to revenue the details of disposals, and losses available to c/f.

but have you disposed of the asset, or is it just down in value? no CGT (gain or loss), until the asset is disposed of

pliauskiux

y0ssar1an22 wrote: »

You must file by 31 October in the year after the date of disposal. You must do this even if no tax is due because of reliefs or allowable losses.

you need to declare to revenue the details of disposals, and losses available to c/f.

but have you disposed of the asset, or is it just down in value? no CGT (gain or loss), until the asset is disposed of

Thanks for your reply.

Yes each year I have disposed off of some of the assets, very small quantities, like under 1000 euro, which was takes into account when calculating gains/losses for each year, hence losses made every year.

y0ssar1an22

2017: https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1-2017.pdf

2018: https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1-2018.pdf

2019: https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1.pdf

the form looks a bit daunting, but 90% of it can be ignored.

PM me if you need any help

pliauskiux

y0ssar1an22 wrote: »

2017: https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1-2017.pdf

2018: https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1-2018.pdf

2019: https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1.pdf

the form looks a bit daunting, but 90% of it can be ignored.

PM me if you need any help

Thanks a lot!

What about the unprompted qualifying disclosure? Isn't that something that needs to be done if I haven't reported CGT in previous years?

y0ssar1an22

pliauskiux wrote: »

Thanks a lot!

What about the unprompted qualifying disclosure? Isn't that something that needs to be done if I haven't reported CGT in previous years?

you could complete the 3x forms, post them to revenue along with the disclosure letter. as no taxes are due, there is nothing to charge interest/surcharge on.

i suppose in the interest of completeness you should make the disclosure

pliauskiux

y0ssar1an22 wrote: »

you could complete the 3x forms, post them to revenue along with the disclosure letter. as no taxes are due, there is nothing to charge interest/surcharge on.

i suppose in the interest of completeness you should make the disclosure

Any idea what the format of the disclosure letter is?

y0ssar1an22

PM me your email and i'll get you a sample letter

barneystinson

Unprompted qualifying disclosure is total overkill here. You're only making work for yourself and some poor soul in a compliance team in Revenue.

Just file the returns so there's a record of the losses you're carrying forward.

/thread

Geuze

pliauskiux wrote: »

Hi guys.

I've been investing into crypto currencies over the past few years, making a loss each year. I haven't submitted CGT report to revenue yet, and looking at it now it seems that I need to make a Unprompted qualifying disclosure.

I have lost thousands on bank shares.

Your suggestions never crossed my mind.

No need to do any of them.

When the time comes that I do sell my other shares, hopefully making a gain, I will then deduct the past losses.

Calahonda52

Geuze wrote: »

I have lost thousands on bank shares.

Your suggestions never crossed my mind.

No need to do any of them.

When the time comes that I do sell my other shares, hopefully making a gain, I will then deduct the past losses.

have you disposed of the loss makers,I am in the same boat but have not actually sold them?
I gather to log the loss you need to dispose of?

Geuze

Calahonda52 wrote: »

have you disposed of the loss makers,I am in the same boat but have not actually sold them?
I gather to log the loss you need to dispose of?

I have not sold any yet.

I have been massively diluted, so instead of say, 500 AIB, I now own 5.

Calahonda52

Geuze wrote: »

I have not sold any yet.

I have been massively diluted, so instead of say, 500 AIB, I now own 5.

I share your pain by 4
AIB/BOI/PTSB/Anglo

Not that bothered about them as I have crystallised 100k losses forward from property disposals which will see me out.

Too much hassle to go back to 1980 and do the math

Bubbaclaus

Geuze wrote: »

I have lost thousands on bank shares.

Your suggestions never crossed my mind.

No need to do any of them.

When the time comes that I do sell my other shares, hopefully making a gain, I will then deduct the past losses.

"No need to do any of them" is a dangerous suggestion to make. Revenue do not allow carry forward losses to be offset against gains if the losses haven't been reported in the year of loss.

barneystinson

Bubbaclaus wrote: »

"No need to do any of them" is a dangerous suggestion to make. Revenue do not allow carry forward losses to be offset against gains if the losses haven't been reported in the year of loss.

Revenue don't get to decide that. There is no claim for relief for losses until the year that they are set against a gain. They have to be capable of being proven, in the year that they are deducted, regardless of whether their existence was recorded on previous years' returns.

Geuze

Bubbaclaus wrote: »

"No need to do any of them" is a dangerous suggestion to make. Revenue do not allow carry forward losses to be offset against gains if the losses haven't been reported in the year of loss.

Really?

I wonder have you any further guidance on this?

Calahonda52

Bubbaclaus wrote: »

"No need to do any of them" is a dangerous suggestion to make. Revenue do not allow carry forward losses to be offset against gains if the losses haven't been reported in the year of loss.

Where are you coming from with this idea?

Losses are only reported when realised/crystallised, so are you suggesting that if I crystallise a loss in 2018, that I have to report it in my 2018.

Since the loss would arise from a disposal, the disposal would be reported any way so where are you coming from?

Bubbaclaus

Calahonda52 wrote: »

Where are you coming from with this idea?

Losses are only reported when realised/crystallised, so are you suggesting that if I crystallise a loss in 2018, that I have to report it in my 2018.

Since the loss would arise from a disposal, the disposal would be reported any way so where are you coming from?

You literally just said you are reporting the loss in 2018, which is what I'm saying. So you are agreeing with me.

Some people think there is no need to report the loss and then run into issues when they try and claim carried forward losses against a gain in the future.

okidoki987

To carry forward a loss, you need to have crystallised it.
Losses can be carried forward indefinitely but if it was me, I'd return it in the
year I sold the shares to realise the loss, might save any hassle with Revenue.
I guess the 4 year rule would apply to the losses?

barneystinson

Jesus wept. I'll try again.

From Revenue's Tax & Duty Manual (https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-02-05.pdf):

"A deduction in respect of an allowable loss can only arise in a chargeable period when there is a chargeable gain against which that loss can be offset. A deduction of an allowable loss must be made in a tax return for the chargeable period in which there is a chargeable gain.

Where an allowable loss arises in a chargeable period and there is no chargeable gain against which it may be offset in that chargeable period, there is no requirement for a person to include the loss in a tax return for the
chargeable period in which the loss arises. It is not possible to make a deduction for an allowable loss in the absence of a chargeable gain."

Bubbaclaus

barneystinson wrote: »

Jesus wept. I'll try again.

From Revenue's Tax & Duty Manual (https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-02-05.pdf):

"A deduction in respect of an allowable loss can only arise in a chargeable period when there is a chargeable gain against which that loss can be offset. A deduction of an allowable loss must be made in a tax return for the chargeable period in which there is a chargeable gain.

Where an allowable loss arises in a chargeable period and there is no chargeable gain against which it may be offset in that chargeable period, there is no requirement for a person to include the loss in a tax return for the
chargeable period in which the loss arises. It is not possible to make a deduction for an allowable loss in the absence of a chargeable gain."

Very good. Now go to the part where it says all disposals need to be reported in the year of disposal, regardless of whether a taxable gain has been made or not.

If you don't report your loss in the year it occurred then revenue will wonder where that carried forward loss you are suddenly using to offset a gain has come from.

barneystinson

Bubbaclaus wrote: »

Very good. Now go to the part where it says all disposals need to be reported in the year of disposal, regardless of whether a taxable gain has been made or not.

If you don't report your loss in the year it occurred then revenue will wonder where that carried forward loss you are suddenly using to offset a gain has come from.

Reporting the disposal is one thing. Reporting the loss is another. If you're filing a return you should record all of these things, but if you don't, it ultimately makes no difference, it's the year that you claim a deduction for the loss that you need to able to prove your loss. This means retaining the paperwork indefinitely for losses that you are carrying forward.