Where assets that have become worthless, it may be possible to make a negligible value claim, allowing a loss to be realised which can be set against chargeable gains to reduce the capital gains tax liability. A negligible value claim can be made either on the self-assessment tax return or in writing to HMRC.
Shares of negligible valueWhere the claim is for company shares and securities and the company is in liquidation, the following information must be given to HMRC:
- a statement of affairs for the company and any subsidiaries;
- a letter from the liquidator or receiver showing whether any return will be made to the shareholders;
- details of how this decision was reached (for example, a balance sheet where liabilities are significantly greater than assets); and
- evidence that no recovery or rescue is likely (for example, a statement that the company has ceased trading).
- the company is registered in the UK;
- the company is not registered as a PLC;
- there is capital loss arising from the deemed disposal of shares following the negligible value claim;
- the company was in liquidation and insolvent or had ceased trading and had no assets.
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