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Income Tax Losses - Can someone claim an investment loss in a LTD against PAYE?

Is it acceptable on a self assessment tax return to claim losses on winding up an ltd company under "Have you made any income tax losses in the year?"

For instance if someone is a regular PAYE employee with a company and then.....is seperately a director of an LTD ...invests in the LTD company....which fails and is closed. Can the loss from the investment in the LTD be applied as an "income tax loss" against the PAYE return?

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By occca
04th May 2012 21:07

No

You could put in a loss claim but at best it would be the amount invested in the share capital of the company

They are separate legal entities

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By cfield
07th May 2012 11:08

Negligible value claim

If your client bought shares he could put in a negligible value claim for the amount invested and this can be relieved against either income tax or capital gains tax (obviously depending on his marginal rate).

If the company has already been wound up, he can claim losses on the shares without having to make a negligible value claim.

I think from memory you get a couple of years to do this but best to look up the time limits.

Sadly, I don't think unpaid loans or other bad debts such as assets  transferred can be claimed against tax - and certainly not the losses of the company.

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