Investors set to capitalise upon losses amidst market mayhem

timetotrade helps investors calculate and claim their investment capital losses in advance of October 31st 2008 tax return deadline.

As the Self Assessment deadline approaches, the market collapse over the last year has forced many investors to weigh up their Capital Losses rather than Gains. Over £200 billion was wiped off the FTSE between April 2007 and April 2008. Any investor skilled or lucky enough to have made capital gains above £9,200 during this period is required to declare those gains to the Revenue. But what about investors who are sitting on an overall capital loss after the market meltdown? They too should be looking to file their Capital Gains Tax SA108 return in order to notify HMRC and formally claim their losses. Once reported to the Revenue, these losses can be carried forward indefinitely and used to offset against gains at any time in the future, to help reduce prospective tax bills.

timetotrade has developed a Capital Gains Tax Calculator to help investors determine their capital gains and claim their losses. The calculator can be accessed at http://www.timetotrade.eu . Investors simply input all of their historical investment transactions and timetotrade works out the rest - including complex calculations for share identification rules, indexation allowance and taper relief. Investors can then print off fully completed Capital Gains Tax pages (Form SA108) ready to submit to HMRC to claim their losses, along with the supporting calculations now required by the HMRC.

Since 1996-1997, it has been necessary for investors to formally declare losses to HMRC if they wish to use them to offset against future gains. The losses need to be reported to HMRC within five years after the 31st January following the end of the tax year in which the loss arose. (So there is still time for investors to claim losses going back as far as 2002–2003). If HMRC is not notified of the loss within that five year time-frame, it is too late and the loss is ‘lost’. Once claimed, there is no time limit within which a reported loss must be used - any historical losses claimed can be accumulated and carried forward to offset against gains incurred many years from now.

Dary McGovern MD of timetotrade says, “The market has played a tough hand to investors this year, so it makes precious sense for them to consolidate losses they have made and bank them for when sunnier times return.”

Investors looking to submit a paper Capital Gains Tax return to HMRC must do so by 31st October 2008.

timetotrade tools can be accessed by private investors and investment clubs at http://www.timetotrade.eu

Further Reading

• A Beginners Guide to Capital Gains Tax
• Capital Gains Tax User Manual
• Latest timetotrade Press Releases