Can Capital gain tax sneakily add up?

I made about £15,500 this tax year outside of ISA so that’s about £3200 over my tax free allowance so I assume as it stands I owe HMRC about £320.

I also made about £7,000 last tax year, among that would have been a few losses but since last tax year was also a net gain I assume I can’t carry over any losses into this tax year? As it was low enough no self assessment was filed last year.

Hi @James101, I just saw your post while typing a really long reply so here’s something that might be useful…

  • The key is that the £15,500 gain you’ve made is for the shares you’ve actually sold. If you haven’t sold them, then there’s no taxable gain until you sell them.

  • You must offset your current year gains with current year losses first, before applying the annual allowance. i.e. your losses last year must offset your profits last year first.

  • For current year allowances, you either use it or lose it, so you cannot carry the unused allowance of £12,000 (19/20) less the £7,000 gain you’ve made from last year = £5,000 allowance is lost!

  • For carried forward losses (Prior years), you can chose whether to use it or not. But if you do use the losses, then you must use it before applying the annual allowance. So if the gains made this year is smaller than the allowance, it might not be wise to use up your losses.


Sorry for replying very late but I marked your answer as solution. I hope this will help other people to seriously consider using an ISA, even for very very small accounts, because the rules are just too complicated. Imagine having just 1000£ and, given how easy is to buy and sell (without commissions) you could make a buy/sell/buy/sell everything 100 times in one day, racking up 100.000£ of “asset disposal” thing.
Very messy!

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Fantastic! Glad it’s been helpful :slight_smile:

I personally have maxed out my ISA so have a really large spreadsheet keep track of things!

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An old thread, but I don’t think this is right. You seem to state you go back to previous purchases. The selling of shares look at subsequent purchases of the same shares made 30 days after the sale. Similar for the 1 day rule which relates to shares purchased on the same day.

This seems to be a misunderstanding of the rule which isn’t in place to prioritise recent purchases but to stop the tax year being used to hit maximum allowances before resetting your portfolio the next day.

Using the scenario mentioned here would result in a much simpler way of working our bed and breakfasted shares but unfortunately it would not be compliant or legal. As it is a the accepted answer I hope that it won’t have misled too many people.

Overall it is definitely wise to try to not purchase the same shares 30 days after you have sold some as it makes the tax return much more complex than it otherwise would be.