capital loss on stocks

[joe sod]

I sold stocks this year and made a capital loss of 4000 euro, however i made an income outside of my paye job of 10,000 euro, does this mean effectively i ownly need to pay tax on the balance of 6000 euro, i know that the loss and income are entered in different parts of the tax return, however simplistically is this the case, also do i need documentation with return to prove i made this loss

 

[Copper Beach]

Capital Gains Tax is a seperate tax from Income Tax. Unfortunately there is no provision to set a capital loss on disposal of yr shares against income. However the capital loss can be carried forward against any future capital gain.

 

[mercman]

do i need documentation with return to prove i made this loss

Yes of course you do, as if you were to have an audit in the future and something was found incorrect, you would be charged interest and penalties.

Capital losses can only be offset against Capital Gains. If the gain is made in another sector or trade the losses cannot be used. Talk with an accountant

 

[joe sod]

thanks for that, so in other words a capital loss for this year can be set against a capital gain (if it happens ) for next year. So is it the case that the capital loss is recorded in the tax return so that it can be used against future prospective capital gains. However if i was not to enter the capital loss for this year, and then made back the 4000 loss next year, surely the two would cancel out, My understanding is that you only pay capital gains tax on the capital difference between buying and selling an asset in the year that you have disposed of the asset.

 

[mercman]

My understanding is that you only pay capital gains tax on the capital difference between buying and selling an asset in the year that you have disposed of the asset.

Time is not of the essence. If an asset was purchased 5 years ago and sold at a lessor price 5 years later, there is a Capital loss to be carried forward to use.

 

[joe sod]

thanks for that, i understand now, so a capital loss on one stock disposed of this year should be entered in this years return to be carried forward. A capital gain on another stock maybe next year should be entered in next years return if the stock is disposed of next year.