Is it necessary to obtain HMR&C's prior approval before claiming "Negligible Value" claim against shareholder's (my client) income for subscriber shares in a company which is going to be struck off shortly ? When is the effective date for determining that the investee company has Negligible value ?
Many thanks in anticipation of your comments.
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Timing
When shares become of a negligible value a potential loss arises which crystalises when the claim is made - so you have a degree of control over the timing of the consequential loss. It is also possible to backdate the claim by up to two years i you can show that the shares had become of a negligible value at that earlier date. The fly in the ointment is the word 'become' - injecting money into a failing company does not always create shares of a value which can then become of a negligible value.
However this flexibility will cease when the company is struck off - the shares will cease to exist and now you will have an actual loss by reference to base cost which HMRC cannot challenge.
So the issue becomes timing.