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Online Share Trading

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Tax year end and share trading losses?

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Jim_Bean
Regular Contributor
Can I claim my share trading losses for tax purposes?
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15 REPLIES 15
Shaun_Siddall
Super Contributor
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Jim_Bean
Regular Contributor
thanks Shaun ... should I sell my entire portfolio and try again?
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Shaun_Siddall
Super Contributor
LOL im exiting a few positions today! Instalments and rubbish that are expiring in 3 months.
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Shaun_Siddall
Super Contributor
Not bad if you get 40% of your loss back.
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Theater_Cat
Super Contributor
Against what do you want to claim it?
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Shaun_Siddall
Super Contributor
Against your other taxable income.
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dookie
Regular Contributor
Lucky you to be on 40% already! Suzie Orman has the wonderful outlook that the more tax you pay the better because it means you're making more and get to keep more. However, she admits that when push comes to shove, even she needs a bit of encouragement to believe this. I haven't had to pay tax on my trading yet, but I'm accumulating an assessed loss for that fateful day when I eventually turn profitable! One day when I'm big. Virtual drinks for the forum when that happens :-)
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Theater_Cat
Super Contributor
No, you cant. Unless your other taxable income is of the same nature (i.e. trading shares).
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CrownA
Super Contributor
I think the taxman will ringfence your share portfolio losses against future losses. Thus not allowing you any deduction in tax. I had Trouble with SARS in 2002, and the esteemed auditor took every trade, buy and sell as a profit. Worked out his cut, and charged me. And you know what they want - you must pay and then argue about it!
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dookie
Regular Contributor
GAWD.... I'm getting worried. I thought there were certain very clearf indications for ring fencing, ie only above a certain amount, only in certain trades, losses in x out of y years etc. and I didn't think I'd "qualify" for ring fencing. Jaysus.... and why do they always have to take 89 & 3/4 days with my assessment!!! One other thing I wondered about. I called the call centre and it sounded like the person on the other side understood my query. For your total tax liability... if you have a loss (or assessed loss) in one category, like share trading, then is that offset against net income from anothers source, eg an annuity. She clearly said yes. I can understand that you can't offset an expense from one category against income from another ie you can't deduct say depreciation on your pc which you use for trading against say income derived from .... eg. farming. I thought if I have a small income from annuity, and a gargantuan nett trading loss, my total tax liability is 0?
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Shaun_Siddall
Super Contributor
Is it ring fenced?? I dont think so?
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olilau
Frequent Contributor
firstly it would depend whether you are trading in your personal capacity or out of an incorporated entity. if you trade in a company then even depreciation on equipment par example is a valid tax deduction against your income, as long as that asset was working in the production of income in the company. (even to the point of generating a loss) in that case, you don't get a 40% saving (corporate tax rates ar not 40%) so i assume that you are trading in your personal capacity ? in that case you lump your "investment stuff" iro shares together, and off set any losses on share trading against gains in share trading. you cannot, if you earn a salary in a normal job for instance, off set share losses against normal PAYE paid iro your salary. one area i am not 100% sure of, is that what happens if a trader makes investments and holds them over a longer period, ie not traded for trade , but traded for an investment. in that case capital gains tax would apply, not income tax, plus you have an additional exempt amount of 16K.
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dookie
Regular Contributor
Thx. Ol. No I trade in my personal capacity. Don't earn a salary. Only other income is a small living annuity. So, are these two things then handled seperately ie a loss in investing does not reduce in any way the tax liability from the annuity income? Assessed investment will then be kept in the investment category and only offsett against investment losses in future years. With investment, I actually short term day to day speculation (income) in my understanding.
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dookie
Regular Contributor
Oops... I mean: Assessed investment will then be kept in the investment category and only offsett against investment losses in future years? With investment, I actually mean short term day to day speculation (income) in my understanding. Long term investment >3 years is something else I reckon: cap gains?
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CrownA
Super Contributor
I say all of us with losses should all claim it - then SARS is going to be losing big time. Then they will make a new ruling, change the law, or something. You will never win. Change is constant. or they simply ringfence as if your trading is a hobby, and you are stuffed. So all of you must TODAY draw (request) R100 from your trading account, and say, yes I use trading as an income source.
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