A friend was one of a few who was conned into joining a "private investment club" and was relieved of 130k when the founder disappeared with everyone's money. The club had beem unregulated by the FSA by being "private". The police are investigating but the money has gone for good.
The money invested was not shares as such, the investors were promised, and initially given high monthly returns (to encourage the word spreading to new investors). It seemed too good to be true - and it was. This was a huge sum for my friend who mortgaged herself to the hilt.
I wondered if there was any way to relieve the loss against tax. I don't know whether it would fall under a .s24 claim - there's certainly negligible value.
Please can anyone help?
Elizabeth
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Please say more..
...about "Losses due to fraud can be offset in the period". How should she do this? Does this mean that nothing can be carried forward against future profits?
Automatic?
Alexander
As I understand the provisions of PoCA 2002 restraint (freezing) of assets of a person under investigation is by no means automatic.
In England & Wales the position is set out in section 41 "the Crown Court may make an order" and in Scotland section 120 makes similar provisions.
Although parts of PoCA 2002 apply throughout the UK some parts of the Act apply to only some part of the UK, see section 461.
In many cases the practical differences are not great (although a matrimonial home is treated differently in Scotland from in England & Wales in connection with confiscation).
It may be the case that in practice law enforcement agencies and courts in some jurisdictions make more routine use of restraint orders than others.
David
Is there a contract?
In a 'boiler house' scam , I have successfully persuaded the Revenue that as my client had a contract to acquire shares-which were never delivered- he had an allowable CGT loss not on the shares , but rather on the "chose in action" which the contract represented.
That may give you a pointer to rescuing something from the wreckage.
Compensation from the fraudster
Elizabeth
This is a sad story. Your friend has my sympathy.
I know it is a slim hope, but your friend may be able to obtain some compensation from realisation of the fraudster's assets.
If the fraudster is convicted and if (a big 'if') he / she has any assets, the court can order compensation. Your friend should have a word with the police about this.
Presumably there is no chance of your friend getting anything from someone else (with a deeper pocket!) such as anyone who advised her that the investment would be a winner, or any financial institution in which she had been told (untruthfully) the money had been invested. We are clutching at straws now!
If your friend is seeking tax advice from you professionally, of course you have to report the fraud to NCIS but your report can be brief as the police are already investigating and you presumably have no new information for them.
As for tax relief for her loss, others are better placed that I to comment.
The moral of the story once again is, as you say yourself: "If it sounds too good to be true, it probably is!"
David
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Victim Support
Elizabeth
It might be worth your friend contacting the charity Victim Support either through their website or on 0845 30 30 900.
(Not for tax advice but for advice and support in coping with the consequences of the crime.)
David