CGT on lost shares/scam

CGT on lost shares/scam

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Hi 

i have an elderly client who unfortunately i think has been part of a scam - i am still trying to find  more out about this but looking ahead and would be grateful for any input.

some brief background

The client has sold a large amount of shares (hundreds of thousands and probably after being contacted by a scammer) he has realised a gain on these disposals - the CGT  is around £45000

He has then invested these profits in some rather suspect looking investments and has received little or no paperwork from anyone. We have tried to contact several of the people involved but are having no luck.

He has told us that he has spoken to the police and the bank - but again despite trying have been unable to talk to anyone.

I am now wondering can i put these 'investments' - for want of a better word down as capital losses?

Replies (8)

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By cheekychappy
11th Feb 2016 15:59

No, you can't.

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By Banzai
11th Feb 2016 16:10

No "Asset"

on which a loss has been made in most cases, so no capital loss claim. This can be an awful situation and you need to find people to sue instead usually.

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David Winch
By David Winch
11th Feb 2016 17:13

ML Suspicious Activity Report

You need to consider whether you are obliged to file a Suspicious Activity Report with the NCA.  Note that you will NOT be obliged to file a SAR where the condition is s330(3A) PoCA 2002 is NOT satisfied or where either of the conditions in s330(6)(a) or (b) are satisfied.

There is a copy of s330 HERE.

David

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By jonibarnes
13th Feb 2016 22:47

Thanks for the input guys

Any chance the bank could be made to pay any compensation ? Client is old and vulnerable don't suppose they are required to get involved - ie should they of noticed hundreds of thousands of pounds being paid out which is way out of the ordinary ?

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Replying to SXGuy:
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By DMGbus
16th Feb 2016 10:45

Consumer Credit Act protection 1974 s75

jonibarnes wrote:
Thanks for the input guys Any chance the bank could be made to pay any compensation ? Client is old and vulnerable don't suppose they are required to get involved - ie should they of noticed hundreds of thousands of pounds being paid out which is way out of the ordinary ?

In the past I have read of cases where payments by Credit Card to scammers have been repaid by the Credit Card companies (Consumer Credit Act 1974 section 75).

The CCA1974s75 makes it a very good idea to use Credit Cards for transactions over £100 whenever possible.

Regarding debit card payments there is, so far as I am aware, no specific legal protection like exists for credit card payments;  However I have occasionally seen reports that say something like "international visa rules - failure to deliver - card charge back" can be applied but this seems to be more of a voluntary scheme of things.

Unfortunately some of the scams that are around involve bank transfers or other money transfer processes and in that case I see zero chances of the banks being liable.

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By cheekychappy
14th Feb 2016 10:54

Not a chance

Your client paid the sums voluntarily. If the bank flagged it up, the chances are your client would have said that the payments were genuine. 

 

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By slowthinker
16th Feb 2016 10:18

Sympathies

My late father fell victim to a couple of these scams 7-8 years ago.  Searching the Motley Fool website was the first step I took to realise that there was something wrong.  He invested a lot in shell company shares which became worthless - fortunately through a FCS registered broker so he was able to claim misselling and recover most of the loss.  A smaller amount was sent to the US for a fraudulent share purchase - the perpetrators were caught and convicted, and there will some victim compensation from seized assets.  The City of London Police investigated before passing on to the US authorities. When he died, the US shares were accepted as worthless for Inheritance Tax.

I hope this information will help you and your client.

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By Montrose
16th Feb 2016 10:29

Losses on a scam could be allowable for CGT

In similar circumstances we have successfully argued that what the client had acquired  was a "chose in Action" arising from the arrangements .

 The initial-meagre-paperwork was sufficient to evidence the existence of the Chose in Action.

Worth trying!

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