Capital gains loss

voodoo

Hi, quick q I hope someone can help with. I made a couple of investments in shares of speculative businesses which haven’t worked out - 1 of which went into receivership - 4D Pharma. When filing my tax returns can 8 claim any CGL on this at all?

Geuze

You can put the capital loss against a capital gain made in the same year.

It will reduce your total cap gains.

For example:

capital loss = 5,000

capital gain = 7,000

Taxable capital gain = 2,000

Otherwise, any capital loss can be carried forward against future possible capital gains.

Donald Trump

https://www.boards.ie/discussion/comment/121130187#Comment_121130187

Can you decide how much of the loss to use?

i.e. can the person elect not to use 1270 of it so that they can use their annual allowance for that year?

Geuze

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/if-you-make-a-loss.aspx

You might find the answer here.

Peregrinus

No, you can't.

One other point worth emphasising — you can't claim a loss just because the shares have tanked. There has to be some event which can be treated as you disposing of the shares; only then does your loss become allowable. That would usually be the liquidation or strike-off of the company.

If that hasn't happened, then you can claim a loss if the inspector is satisfied that the value of the asset is negligible. For shares, it's not enough that they are currently worthless; the inspector also has to be satisfied that there is no prospect that they will recover in value and become marketable in the future — so, for example, the company has gone into receivership, is no longer trading, has no assets that would be distributed to shareholders on a wind-up, that kind of thing.

Geuze

I see your point.

The OP never mentions an actual sale of the shares.

Peregrinus

https://www.boards.ie/discussion/comment/121132790#Comment_121132790

He does mention a receivership, and most receiverships happen in circumstances that will allow the inspector to take the view that the shares are a write-off. In other circumstances, without going into receivership, a company may sell its business, or cease trading and sell its assets, for a price which won't even satisfy its obligations to creditors, so shareholders will get nothing. Once the directors confirm that this is the situation the inspector will normally accept that too.