If a father has a share holding in an illiquid fund can he sell these to his son at market value and crystallise a loss?
Thanks
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Yes, but...
It will crystallise a loss, but the loss will be "clogged". You will only be able to set it against gains arising on the transfer of assets to the same son. So it probably won't achieve what you're hoping for. David
Not necessary to sell
If an asset is sold to a connected person the disposal proceeds are the market value.
So if the asset is worthless the disposal proceeds are nil.
However, if the purpose is to crystallise a loss it is not necessary to sell the asset as a negligible value claim can be made.
In this case the asset is deemed as having been sold and immediately reacquired at the current market value.
The claim can be backdated for 2 years (which it could not if it had been sold to S) provided the asset had become negligilbe in that time.