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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I have a property in Spain which I have had years.

Resolved Question:

I have a property in Spain which I have had for several years. I have never lived there. I am likely to make a loss of 70,000 euros on the sale before 5.4.15. This equates to about £60,000.
I have some shares in the UK on which I will realise a gain of £40,000 if I sell them before 5.4.15.
can I offset the overseas loss against the UK Gain?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
You can report losses on a chargeable asset to HM Revenue and Customs (HMRC) to reduce your total taxable gains. You may have to pay Capital Gains Tax even if your asset is overseas and you sale. This makes the property in Spain a chargeable asset.
Capital losses are automatically deducted from capital gains in the same year. Any allowable unused capital losses may be carried forward indefinitely to relieve future gains.
Work out the gain for each asset. Do this for the personal possessions, shares, property or business assets you’ve disposed of in the tax year.
Add together the gains from each asset.
Deduct any allowable losses.
When you report a loss, the amount is deducted from the gains you made in the same tax year.
Customer: replied 2 years ago.

You state "Capital losses are automatically deducted from capital gains in the same year".

Can you please confirm that this applies even if the loss is from the sale of a property in Spain.

Regards

K XXXXX

Expert:  TaxRobin replied 2 years ago.
The chargeable assets are allowed to be used for loss. The property even though outside the UK would still be a chargeable asset (if you had a gain you would be taxed in the UK because of your residency status).
This allows for the loss to be used against gains.
If the property were not liable for CGT in the UK and you made a loss then you could not use the loss.
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