How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4181
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Madam, If I incur a capital gains tax liability in

Customer Question

Dear sir/Madam,
If I incur a capital gains tax liability in 2015-16, but incur a loss in selling a property in 2016-17, can I offset the value of the loss against the amount of the gain?
Or does the gain and the loss have to be incurred in the same financial year?
Prof. Hugh Foot
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Hugh, I am Keith, one of the experts on Just Answer and pleased to be able to help you with your question. To offset the gain in 15/16 you would have to make a loss in that tax year on another transaction. You cannot carry back a capital loss, only carry it forward indefinitely. Remember that you have an annual Exempt Amount of 11.1K to offset any gain. I do hope that my reply has been of some assistance. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.

Keith .. thanks very much for your answer ... it is what I had expected!

If I am allowed one follow-up question (without further payment!), then i would want to ask you whether the only way of carrying the capital loss forward is by literally waiting until such time as one becomes liable to a further capital gain in a future year, and then use the offset of the value of the loss to reduce the liability in that future year.

That sounds at though it might be possible?

The only problem for me is that I am emigrating to Australia in early 2017 (hence the reasons for selling my assets now) and will not be subject to tax in the UK (unless, I suppose, my pension is still taxed here?). But no likelihood of being subject to capital gains tax again in the UK after I leave the country.

Hugh

Expert:  bigduckontax replied 1 year ago.
Oh yes Hugh, arranging disposals to your convenience rather than that of HMRC is a perfectly legal method of tax avoidance. When you leave these shores for Oz remember to sent a Form P85 to HMRC. On receipt they will classify you as non resident for the tax year after your leaving date and furthermore split the year of leaving into two portions, on resident and the other non resident. Pensions are usually taxed in country of origin. When you are resident in Australia and subject to their tax regime then under the Double Taxation Treaty between the two countries the same income stream cannot be taxed in both jurisdiction. Any tax deducted by the UK will be allowed as a tax credit against the liability elsewhere. Regrettably Capital Gains Tax (CGT) follows you once you emigrate. Here is a summary from Experts for Expats: 'It used to be the case that by simply leaving the UK for a complete tax year, and then disposing of any profitable assets (property, shares etc.) during that year could relieve you of the burden of Capital Gains Tax.However, one year is no longer a sufficient length of time. An individual now has to be non-resident for a minimum of five complete UK tax years to take advantage of this rule. Proper planning is clearly very important in these situations as a few months miss calculation here or there can make a significant difference in your tax liability.' Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes! Please be so kind as to rate me before you leave the Just Answer site.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your excellent support.

Just one additional point. Australia does not have CGT as such, any capital gains are added to you income and subject to Oz Income Tax.