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As the Self Assessment deadline approaches, the market collapse over the last year has forced many investors to weigh up their Capital Losses, rather than Gains.

This is according to analysis released by Timetotrade.eu today. 

Over GBP200 billion was wiped off the FTSE between April 2007 and April 2008. Any investor skilled or lucky enough to have made capital gains above £9 200 during this period is required to declare those gains to the Revenue.

But what about investors who are sitting on an overall capital loss after the market meltdown? They too should be looking to file their Capital Gains Tax SA108 return in order to notify HMRC and formally claim their losses.

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 help reduce prospective tax bills.

Since 1996-1997, it has been necessary for investors to formally declare losses to HMRC if they wish to use them to offset against future gains. The losses need to be reported to HMRC within five years after the 31st January, following the end of the tax year in which the loss arose.

There is therefore still time for investors to claim losses going back as far as 2002-2003.

If HMRC is not notified of the loss within that five year time-frame, it is too late and the loss is 'lost'. Once claimed, there is no time limit within which a reported loss must be used - any historical losses claimed can be accumulated and carried forward to offset against gains incurred many years from now.

Dary McGovern MD of timetotrade says, "The market has played a tough hand to investors this year, so it makes precious sense for them to consolidate losses they have made and bank them for when sunnier times return."

Investors looking to submit a paper Capital Gains Tax return to HMRC must do so by 31st October 2008, if one or more of the following conditions were met during the tax year ending 5th April 2008:

Disposed of chargeable assets in the year to 5 April 2008 worth more than £36,800

There are allowable losses which must be deducted from chargeable gains; and chargeable gains before deducting losses and applying taper relief total more than £9,200

There are no allowable losses which must be deducted from chargeable gains and after applying taper relief taxable gains total more than £9,200

They want to claim an allowable capital loss