Client was transferred capital losses from a trust with some shares he was distributed from the trust. The losses can only be used against disposals of the same asset(s). What I can't seem to find out is whether the whole of the losses are brought forward against the first disposal or whether the losses are attributable on a 'per share' basis. Let's say 50,000 shares were distributed to him with a value of £100K and losses of £250K attached to them and has now sold 15,000 shares for £500K. If each share is treated as an individual asset, then the calculation would be £500k less £100K less losses of £250K x 15,000/50,000 = £325K taxable. On the other hand if all the losses must be set against the first disposal of the assets, the calculation would be £500k less £100K less losses of £250K = £150K taxable - a large difference. Can any one enlighten me please?
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Neither is correct
If you don't understand why neither of your suggested solutions is correct then you need to consult an accountant who does.