Investors battered by stock market avalanches can look on the bright side when filling in their tax returns

by Simon Keane

It has been a terrible year so far for equity investors – but that is only if you are taking a short-term view. Private shareholders are being reminded now is an ideal time to book any losses to offset against future tax bills.

During the past tax year to 5 April 2008 the FTSE All-Share declined by around 9%. Any losses can be recorded in self-assessment tax returns due by 31 October.

Dary McGovern, managing director of timetotrade which advises private investors about tax liabilities, says: ‘Once reported to the Revenue, these losses can be carried forward indefinitely and used to offset against gains at any time in the future.’

To qualify, HM Revenue & Customs says investors have to report losses within five years after the 31 January following the end of the tax year in which the loss arose. But the self-assessment form (part SA108) also enables investors to book losses.

For the skilled few who achieved gains last year it will be the last in which to claim taper relief whereby higher-rate tax payers can reduce their charge from 40% to 10%. The websites www.timetotrade.eu and www.taxcalc.com offer tax calculators to assess liabilities.