NEGLIGIBLE VALUE CLAIMS

NEGLIGIBLE VALUE CLAIMS

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I have a Client who subscribed for £70k share capital in a UK trading Company (unquoted) which was dissolved in September 2014. Can the Client make a loss claim against Income under s131 ITA 2007 in his 2014 Tax Return-i.e before the dissolution date assuming he meets all other qualifying conditions?  Can't see answer in legislation? He also has £100k of shares in a Company dissolved in November 2012-Can he claim capital losses on these?

Thanks in advance for views.

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By martinscutt
24th Nov 2014 11:37

Too late?

I understand you must still hold the shares at the date of making the claim and since the companies are dissolved the assets no longer exist at all.. Setting of against earlier income is the only going back to be had, providing the shares qualified in the earlier tax years also, but that is for nought if you cannot make the claim in the first place.

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Replying to Fum:
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By jonnyd
24th Nov 2014 14:05

Too late?

Yes but the shares existed at 5th April 2014 and the Tax Return has not been submitted yet?

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By CrowtherP
24th Nov 2014 13:54

losses; EIS or not; Limit £50,000 or not. Carry-back.
UK losses on non-EIS unquoted trade companies now restricted to 25% of his income.    But the Minimum allowed loss amount is £50,000.You can do a 2014-15 section 131 loss carry-back to 2013-14 income, if you want.You can claim the recent dissolution loss in 2014-15.The dissolved 2012-13 loss on the £100,000 [subscribed for those shares??] can be claimed against 2013 income, before the £50,000 loss claim rules restriction came in on 06 04 2013.The 2012-13 loss can go against 2012 income!The 50,000 loss claim rules do not affect approved EIS-company loss claims. See Schedule 3 to 2013 Finance Act.The negligible value claim rules apply under section 131 ITA 2007 [via section 24 TCGA] to the loss, destruction or extinction of an asset.  Thus company shares in dissolved companies qualify, or at least i hope they do!

The deadline for the 2012 loss claim is 31st January 2015!   Run all the numbers!

 

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By CrowtherP
24th Nov 2014 14:19

so if the shares existed at 5 4 2014

So for the shares that existed at 5 04 2014, all you can do i think is

to have 2014-15 relief through the payroll [viz. PAYE code adjustment!]or you could do a carry-back negligible value loss claim in paper format [?], and carry back from 2015 tax year into 2014........or via box 16 [i think this is the right box there are so many!] on the tax calculation pages and claim the 40% tax relief [45%?].

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By jonnyd
25th Nov 2014 12:26

Negligible value

Thanks to all contributors here as always-Much appreciated!

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