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I'm curious, in the US you're only allowed to apply $3,000 in losses each tax year. A common practice is to "tax loss harvest". Let's say you invested $100,000 in the S&P 500 index fund, which dropped 12%. You then sell your S&P 500 shares and immediately invest in another, somewhat similar fund, say a Total Market Fund. You've just "lost" $12,000 but because the new investment is very similar to the old investment, when the S&P 500 recovers 12% the new fund should recover a similar amount.
Now, you can only apply $3,000 of that "loss" each year, or over 4 years.
Is there a similar cap in the UK, or can you apply that whole 12,000 against capital gains in the first year?
Another off topic question, are capital gains treated as income, or are they taxed at different rates such as in the US?
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