I currently hold stocks on a company that has lost 50% of its share value from the time I purchased, can I sell this and offset the loss while claiming tax for this financial year. (The shares were purchased 2 years ago)
If you sell these shares you will make a capital loss. You can offset that capital loss against capital gains you make this income year, however you cannot offset them against other income.
If you do not have enough capital gains to offset all the losses against or you have no capital gains this year at all, then any unused capital losses can be carried forward to offset any capital gains in future income years.
You cannot offset your gain or your loss from selling of share or property against your income. Think of them as two different things. You buy share for $1000 and sell it for $500 you make $500 loss. That is your capital loss for the year that gets carried forward to next year. If next year you make $1000 profit from selling another shares you deduct $500 loss from previous year from $1000 profit so net gain for that year is $500 and you are liable to pay tax on it. If you make loss of $1000 that year as well you add that your capital loss from previous year and carry forward loss of $1500 to next year as a loss.
If you held share for more than a year and you make profit on it you are liable to pay tax on only 50% of the profit due to CGT discount after deducting any capital loss.