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: 5608
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I traded some Contracts for Difference (CFDs) and

This answer was rated:

Hi Sam, I traded some Contracts for Difference (CFDs) and Cryptocurrencies last financial year and made a loss - via Etorro. I'm employed and pay basic rate income tax, don't have any other income, and don't submit a tax return to HMRC. Can I claim tax relief for the losses via income tax or any other route? Thanks.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Trading in both these areas can expose you to Capital Gains Tax (CGT) on the net gains made in the year. You have an Annual Exempt Amount of 11.3K [17/18] and 11.7K [18/19] to offset gains. Any net losses cannot be used against other income, only carried forward to future years. You will have to self assess annually to account for your activities. I advise you to keep comprehensive records of your trades.

I do hope that you have found my reply of assistance.

Customer: replied 6 months ago.
Thank you for your prompt reply. "Any net losses cannot be used against other income, only carried forward to future years". So that I am clear: If I do not pay CGT I can not offset this loss in any other way. This can be done in future years, but only offsetting CGT. (I think this is what you are saying, please can you confirm). If I had another income - for example self-employed - I can not offset this loss, again only if the income incurs CGT? How many years can this be carried forward for? Do I need to submit a tax return this year, or could this be done in future years if needed? I will keep records, thank you.

Yes, that is what I am saying in this instance. Losses can be carried forward indefinitely. Capital gains made elsewhere can be offset, but be careful not to waste your AEA, that is a 'use it or loose it' [HMRC's words not mine] concession.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 6 months ago.
Thank you very much. On my last question, when would I include this on self-assessment? Do I need complete a self assessment for last year in order that this is recorded with HMRC? (There would be nothing else on it). Or do I keep records and include them on a self-assessment form that I complete in the future if there is a time that I am liable for CGT? Thank you.

You should take steps to amend your last year's return.

When you make a self assessment you must pay the tax due by 31 January in the year following ie for the 18/19 yest by 31 January 2020.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 6 months ago.
Apologies, I'm not sure my question was clear. I haven't made a return for last year so can't amend it. I earned no income / gains so don't need to pay any tax for last year. (Excepting income tax via my employer). My question is do I need to complete a self assessment for last year's loss, in order that I may be able to use it to offset CGT in future years, or do I only include these transactions on the self-assessment at a future time when I am offsetting CGT?

It would be a good idea to advise your tax office of the situation. They may well ask you to self assess.

Customer: replied 6 months ago.
Thank you very much for your help.

Delighted to have been able to help.

Please don't forget my rating.

bigduckontax and other Tax Specialists are ready to help you

Thank you for your support.