Financecalendar_todayLast updated: Apr 2026
What is Tax-Loss Harvesting?
/tæks lɔːs ˈhɑːrvɪstɪŋ/
A strategy where you deliberately sell an investment at a loss to offset capital gains you've made elsewhere, reducing the taxes you owe. The proceeds can often be immediately reinvested in a similar (but not identical) investment to maintain your portfolio.
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Everyday Example
You sell a stock fund that lost £500 in value to offset the £500 gain you made selling another fund, meaning you owe tax on zero profit instead of £500.
publicReal-World Application
“Wealthy investors and robo-advisors like Vanguard and Wealthfront automatically implement tax-loss harvesting throughout the year to save clients thousands in annual tax bills.”
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Did you know?
Tax-loss harvesting became mainstream after the 2008 financial crisis when technology platforms made it cheap enough for everyday investors to use, not just the ultra-wealthy.
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Key Insight
You can use losses to your advantage by timing when you realise them, turning bad investment decisions into tax breaks.
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