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Q. During the tax years 2004 and 2005 I sold shares quoted on the London and Irish Stock Market and took a substantial loss.
During this year 2006 I intend to sell shares also quoted on the Stock Market and hope to make a modest gain. My question is, can the gain I make in 2006 be written off against the loss I sustained in 2004 and 2005 for Capital Gains Tax purposes?
Further if a loss is sustained in the past can it be used to balance profits made in the current year. I would be grateful if clarification as so how far into the past a such a loss can be used.
A. Chargeable gains for a year of assessment are aggregated with allowable losses of the year for the purpose of computing the net amount assessable to capital gains tax. Losses brought forward from earlier years are also deductible. Allowable losses which remain unrelieved may be carried forward indefinitely.
Losses must be off set against gains prior to the use of the annual CGT exemption amount of €1,270. The annual exemption may not be carried forward if it is unused in a year.
Gains on development land may only be off set by losses on development land. Losses on development land may be offset against gains on disposals of other assets.
Inflation relief (indexation) cannot convert a monetary gain to an allowable loss.
Effectively there are no time limits on claiming capital gains tax losses.
Q. Recently in an article of yours you brought up the subject of making a Will. You advised that the correspondent should talk to a “professional advisor”. I would be grateful if you could now direct me to an appropriate advisor as I wish to discuss problems which I have failed to resolve in my efforts to make a Will for the disposal of what will be a very modest potential estate. I would appreciate any help you can give me.
A. Unfortunately I am not in a position to recommend any one professional advisor over another. I would suggest that you either contact a number of solicitors (see Golden Pages) with a view to finding one who would advise you on the legal and tax aspects of making your Will. Alternatively you could speak to a tax advisor with experience in such matters and he/she could liase with your solicitor with a view to drawing up your Will in the most tax efficient manner.
Good luck with your choice.
If you have any queries on money or taxation matters which you would like answered, please send them to "Your Money", c/o Examiner Publications (Cork) Ltd., P.O. Box No. 21, Academy Street, Cork.
Phil Lynch
6 Lapps Quay, Cork.
© First published The Cork Examiner
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