Losses brought forward

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Overview

The Losses brought forward screen displays unused losses brought forward from earlier years.

Calculated figures

When data is rolled forward from the previous year and unused capital losses exist, these are displayed in the following fields as relevant:

  • Unused losses of 1996-97 and later years
  • Unused losses of 1995-96 and earlier years

If the calculated figures are not available, or incorrect, then tick the Tick to provide override figures box and enter the required amount(s).

Clogged losses - available from 2015.2

A clogged loss occurs when a loss is set against gains made on other disposals to the same connected person or losses transferred by trustees when the taxpayer becomes entitled to settled property, but only where the transfer occurred after 15 June 1999.

To view details of losses brought forward from the previous year for connected persons, select the relevant individual in the Clogged losses selection box.

Rollover Relief

Rollover Relief is a capital gains tax relief, which applies when an individual disposes of a business or a business asset and spends the proceeds on acquiring replacement assets during a qualifying period.

Add Rollover Relief

  1. Open the Rollover Relief section.

  2. Enter the name of the asset disposed in Original asset name.

  3. Enter the disposal date in Date disposed.

  4. Enter the amount received in Proceeds.

  5. Select Is provisional to defer the capital gain until a replacement asset is purchased.

Note 

When you select the Is provisional option you do not need to enter any details relating to the replacement asset until you know what it is.

  1. Under Application of proceeds of old asset, enter the details relating to the new asset.
    This includes the following:

  • Description (describe the asset)
  • Date acquired
  • Cost (purchase price)
  • Proceeds used (amount of proceeds used from original asset)
  1. Click Save and Close.

Holdover Relief

Use the Holdover Relief section to defer capital gains and transfer the liability to another party. When an asset is given away for no monetary gain and a capital gain arises, then the holdover relief scheme allows the transfer of the original base cost of the assets to the receiver of the gift. When the recipient disposes of the asset, then the recipient's gain will include the gain held over on the gift, and they will be liable for any capital gains tax.

Add Holdover Relief

  1. Open the Holdover Relief section. The section opens with the Details tab selected by default.

  2. Briefly describe the asset in Description of the asset.

  3. Enter the amount of the gain in Gain held over.

  4. Select the Type of relief, either Held over gain or Deferred valuation.

  5. Under Transferor specify the person transferring the asset by doing one of the following:

  6. Select Is Transferor the client, if the client is the person transferring the asset.

  7. Click Name. The Select Transferor Name window appears, which allows you to search for or create a new client.

Note

When you select the option Is Transferor the Client then you cannot complete the Transferee section.

  1. To transfer the asset click Name. The Select Transferee Name window appears, which allows you to search for or create a new client.

  2. Click Save.

To Make a Claim

  1. Click the Claim tab.

  2. Select the reason for qualifying from the Qualification for relief drop-down. The reason you select here determines the fields that you have to complete.

  3. In Person owning the business, enter their name.

  4. Complete the remaining applicable fields.

  5. Click Save and Close.

Adding a connected person to a disposal

A connected person is a husband, wife, or civil partner living together during the tax year that the asset is disposed. Other examples of connected persons include brothers or sisters. Refer to page CGN 5 of the Tax Return: Capital Gains Summary Notes for a definitive list of connected persons.

  1. From the main Capital Gains data screen, enter basic transaction details for a new disposal
  2. Or select an existing disposal, then press the Full Details button.

For tax years prior to 2015

  1. Select the Connected Person hyperlink.
  2. Enter the name and relationship of a new connected person
  3. Or select the Previously recorded connected person hyperlink to choose an existing connected person.
  4. Select the Losses brought forward hyperlink to view details of any unused losses brought forward from previous years for the selected connected person.

For tax year 2015 onwards

  1. Select the tax year 2015 onwards.
  2. Click the full details button.png button in the Capital Gains tab.
  3. Use the Connected Person list box to select the required person.

  1. If the required connected person is not available, click the  button.
  2. Add details in the Manage Connected Person data screen.

Manage Connected Persons - available from 2015

When the client has clogged losses, details of the connected person(s) are maintained in the Manage Connected Person data screen which is accessed from the Capital Gains Task Bar / Ribbon Connected Persons option.

Add new connected person 

To add a new connected person, select the next blank row.

  1. Enter the title and name in the Name column.
  2. Enter the relationship in the Relationship column.

 Please note that warning messages are displayed when:

  • The connected person name is not unique
  • The relationship, but no name is entered.

Edit connected person

To edit details of an existing connected person, select the name or relationship as required.

 

Deleting connected person 

To delete a connected person first ensure no unused losses are brought forward, and the connected person is not entered in any current year disposal.

  1. Select the row for the relevant connected person.
  2. Press the  button. The Delete confirmation window appears.

Please note warning messages are displayed when:

  • Brought forward losses exist for the connected person being deleted
  • The current connected person is entered in any current year disposal

Note 

If brought forward losses exist, but are incorrect or no longer required, override these losses with zero in the Loss brought forward data screen. When details are rolled forward to the next tax year, as no losses then exist the connected person can be deleted without error.

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