Sell shares at a loss to offset capital gains tax?

ongarboy · 23-09-2015 9:21pm #1

I sold shares earlier this year and made a good gain which means I've a significant capital gains tax bill for year end (approx 6.5K tax bill). I've shares in another stock that are only one third of the value that I bought them at and they have been that way for 7-8 years. If I sold them in the current tax year, I'd be able to offset the loss against the gain and cut my tax bill in half. Would that be a wiser move then selling them in a future year and still incur a loss that I'd have nothing to offset them against? The stock in question has not seen its share price move in years and I really think it's a dud stock with no chance of gaining for years to come.

PS once(if) I dispose of these shares, I won't hold any more so it's not like I'll have future CGT to worry about.

cute geoge · 23-09-2015 9:51pm

If you think these shares will rise why not sell them to offset tax and buy back again at the same price
If there is one thing worse to then shares plumuting in value it is to see shares climb in value after you selling them

24-09-2015 8:53am

Yes, if you don't sell the loss maker you have your tax bill of 6.5k. If you hold the loss maker and sell it in the future, you might not have a gain to put it against. (losses can be carried forwards, but not gains).
If you think the lossmaker is a good investment at current prices, you can always buy again though I think you might have to wait a cartain period between both transactions. Of course if the new purchase then climbs in value you will be liable for CGT when you later sell, using the new and lower purchase price.
You don't seem to have a share portfolio, so I think the obvious action now is to sell and reduce your tax bill.

TheFin · 24-09-2015 10:52am

try following www site for some advice (I cant post URL's) paylesstax.ie/sale-of-shares-tax-saving-tips/

daheff · 24-09-2015 1:55pm

cute geoge wrote: »

If you think these shares will rise why not sell them to offset tax and buy back again at the same price
If there is one thing worse to then shares plumuting in value it is to see shares climb in value after you selling them

You must leave 4 weeks (iirc) between sell and repurchase, otherwise revenue can ignore the sale and recalulate your deemed gain.

OP- if you arent going to hold shares after you sell these dud shares, then yes sell them in this calendar year. Use the loss to offset your CGT liability.

kennedmc · 02-02-2021 5:14pm

I'm slightly confused on using losses to reduce CGT bill that occur within the same year.

E.g. If I have a profit of 5K on sales of share and a loss of 1K is correct approach:

Option1 5K profit minus personal exemption (1,270) x 33% CGT = €1,231 CGT liability LESS €1k loss = €231 Actual CGT liability OR

Option2 5K profit minus €1K loss = €4k chargeable gain minus personal exemption (1,270) = 2730 x 33% CGT = Actual CGT €901

Thanks

tax_tutor1 · 02-02-2021 5:18pm

Option 2 only.
Loss must be realised in same or prior tax year to gain.
Tax year runs from 1 Jan to 31 Dec.

CiarraiAbu2 · 02-02-2021 5:19pm

Option 2 I'm afraid.

Sell shares at a loss to offset capital gains tax?

Comments