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loss relief against chargeable gains

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › loss relief against chargeable gains

  • This topic has 6 replies, 3 voices, and was last updated 10 years ago by Tax Tutor.
Viewing 7 posts - 1 through 7 (of 7 total)
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  • November 22, 2014 at 9:33 am #212106
    Sharfin
    Member
    • Topics: 11
    • Replies: 17
    • ☆

    i’m facing difficulties on this topic… I understand that a tax payer cannot choose the amount of loss to be deducted from income so the p.a/aea may b wasted. is it possible to deduct some portion of the gain and preserve the aea .. and carry the loss forward? coz i saw in some questions that if the cgargeable gain is, say 11000 and a loss is 1500 then 200 is deducted to preserve the aea and the remaining is carried forward.. it is really confusing

    November 24, 2014 at 6:52 pm #212819
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    The taxpayer must net losses of the year against gains of the year even if the gains are below the level of the AEA (10,900) and therefore waste those losses. A capital loss b/f however is only used against net gains of a year in excess of the AEA and is not therefore wasted. See OT course notes chapter 12 section 2.

    November 24, 2014 at 7:01 pm #212820
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    The taxpayer must net losses of the year against gains of the year even if the gains are below the level of the AEA (10,900) and therefore waste those losses. A capital loss b/f however is only used against net gains of a year in excess of the AEA and is not therefore wasted. See OT course notes chapter 12 section 2.

    November 24, 2014 at 8:15 pm #212862
    Sharfin
    Member
    • Topics: 11
    • Replies: 17
    • ☆

    what should be the treatment of the losses b/f from the trading income to chargeable gains after all the income in that year is reduced to zero? should i sett off the loss fully or preserve tha AEA?

    November 24, 2014 at 9:21 pm #212906
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    If the taxpayer makes a claim against total income and then makes the claim against the net chargeable gains of that tax year then the loss is treated like a current year loss and may therefore reduce the net gains of the year below the level of the AEA.

    November 24, 2014 at 9:46 pm #212912
    Yazan
    Member
    • Topics: 32
    • Replies: 32
    • ☆☆

    @Taxtutor said:
    If the taxpayer makes a claim against total income and then makes the claim against the net chargeable gains of that tax year then the loss is treated like a current year loss and may therefore reduce the net gains of the year below the level of the AEA.

    Please, a claim against current (2013/14) year loss can mean you can only set off other loss against current chargeable gains in the same year, that is, 2013/14 and not 2012/13?

    November 24, 2014 at 10:08 pm #212916
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Correct to make a claim against the net gains of 2013/14 the taxpayer must firstly claim relief for the trading loss against the total income of 2013/14

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