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Using the Shape Tool to cut out transparent shape from a Photo

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OK guys this one is annoying me; I am trying to use (let’s say the Ellipse Tool) to place a shape on an image then I want to cut that shape out leaving a transparent hole in the image. I know how to use masks but must be having a senior moment because this is frustrating me. I can obviously get the shape to show the picture (and remove the outside of the shape but not the other way around.

I have tried inverting the Pic and the Shape.

I have tried using the subtract whilst holding ALT but no good.

Can anyone help please.

n1.jpg

n2.jpg

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11 minutes ago, Ray S. said:

Hi Computer lab,

in the second example set the blendmode of the circle layer to erase.

Thanks Ray, I had done it before but just couldnt think, so was over complicating things. Works great - Thankyou very much for your help. 

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