Beginner's Question: Capital gains and losses

Hi All,

Just quick question i was hoping somebody could help me with.

In order to lock in a loss for the purpose of offsetting a capital gain on another stock, is there any time frame i need to be out of that stock for?

In other words, if i was to sell out at a loss, could i buy back in minutes later and still use the loss to offset the gain (in the other stock)? Or does it need to be longer?

I have worded that badly but any help would be appreciated!

thanks in advance

I think the answer is technically yes, the loss can be used to offset other gains no matter how soon you buy back in, as that's a completely new and unrelated trade.

However, I was warned when considering other similar arrangements that if it was done often enough, with the obvious goal of reducing tax, then Part IVa (the anti-avoidance provisions) may be able to be used. It might be deemed that there's no commercial reason for it, the only benefit being tax avoidance, and so you could potentially have problems.

You should check with your accountant how much of a risk that might really be for you, which may depend on how often you do it.

Cheers,
GP