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A few years back I held shares in a company that declined dramatically in value (to the point it wan't worth the cost of selling them), then got suspended, then ... silence. I assume that it went bust, but it's not on the revenue's negligible value list.

At the time I did nothing because paying CGT seemed a remote prospect. But I've done well since then, and this current tax year a CGT bill is a near-certainty.

Will I be allowed to claim the loss against this year's CGT bill, or will the revenue say I dragged my feet and that it should have been (uselessly) offset against gains (less than my CGT allowance) in a previous year?

Is it OK to simply to put in on my 2005-6 tax return when they send it, claim negligible value, and hope they accept it?

Have also got some shares in a company that's just been suspended, again I fear the worst. What has to happen before they'll accept negligible value, and alternatively could I flog them to a friend for a penny (how?) to make sure that the loss arises in a year when it'll be useful?
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A few years back I held shares in a company that declined dramatically in value (to the point it wan't worth the cost of selling them), then got suspended, then ... silence. I assume that it went bust, but it's not on the revenue's negligible value list.

Do you want to give me the name and I will check companies house to see what is happening to the company?


Will I be allowed to claim the loss against this year's CGT bill, or will the revenue say I dragged my feet and that it should have been (uselessly) offset against gains (less than my CGT allowance) in a previous year?

Help sheet: IR 286: http://www.hmrc.gov.uk/helpsheets/ir286.pdf

is a good source of info on this. There are probably only three scenarios:

1. The company has possibly already been placed into liquidation and that liquidation has completed in which case you have already effectively sold the shares for tax purposes in which case you must take the loss in the year when you were deemed to have done so (the loss could be carried forward, subject to it not automatically being used against gains in that year).

2. The company has commenced liquidation or something else has happened such that the shares are essentially worthless but "worthlessness" has not been confirmed, in which case a negligible value claim could be made. You can use the loss when the claim is made (assuming that it is subsequently agreed) or IR 286 suggests that you can carry the loss back to the previous tax-year.

3. The shares still have some small value, which is not "negligible", in which case you currently do not have a loss.


Is it OK to simply to put in on my 2005-6 tax return when they send it, claim negligible value, and hope they accept it?

subject to the above yes, but personally I would make the negligible value claim now (today) to get certainty, it would be a pain if this time next year you were told that HMRC consider the shares to have some small non-negligible value - it would be too late to do anything about it.


Have also got some shares in a company that's just been suspended, again I fear the worst. What has to happen before they'll accept negligible value, and alternatively could I flog them to a friend for a penny (how?) to make sure that the loss arises in a year when it'll be useful?

This is essentially scenario 3 above. You need to be certain that your "friend" is not connected with you otherwise you may find that the loss that you create is "clogged", which can be inconvenient. Also, it's easier to give the shares away otherwise you have to deal with stamp duty, which would be a minimum of £5. If though you give them away to somebody who is not connected (and not a charity) then you will dispose of the shares at a deemed market value (s17 Taxation of Chargeable Gains Act 1992).

Assuming that you have the shares in certificated form then you would need to use a stock transfer form to transfer the shares, eg:

http://www.capitaregistrars.com/pdfs/stock.pdf

If you can't find anybody to transfer them to then I have a small private company that has in the past accepted a gift of shares for this purpose.

For completeness, the negligible value list is here:

http://www.hmrc.gov.uk/cgt/negvalist.htm

regards

JakNife
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Thanks JakNife
Have a Rec
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