What does realising losses/gains mean?

A gain occurs when the value of your investment rises above the amount you originally paid for it. Conversely, a loss happens when the value falls below your purchase price. Until you sell, these are unrealised, or ‘paper’, gains and losses.

When you sell your investment, these gains and losses become realised. So a realised loss occurs when you sell an investment for less than you paid for it, and a realised gain occurs when you sell for more than you paid for it. It’s at this point that your gains can be liable for Capital Gains Tax. Note, everyone has a Capital Gains Tax allowance of £3,000 for 2024/25, so if your gains are within this allowance you do not need to report them.

Read more on realising gains and losses on our Learning Hub.

Remember, tax treatment depends on your individual circumstances and may be subject to change.

See gov.uk for more information on Capital Gains Tax

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