TAXtv airs negligible value share debate

The challenges of proving shares are worthless to claim tax relief and how to decide when company directors are negligent in the eyes of the tax system were discussed by tax experts Giles Mooney and Tim Good in the latest episode of TAXtv.

The discussion was based on a tribunal case, Robert Brown versus HMRC, in which Brown invested £250,000 in unquoted shares in a company set up to do research and development. The company didn't make any profit.

He then made a negligible value claim to establish a capital loss on the shares which he...

Continued...

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Comments

I've been in argument with HMRC on this

hiu612 | | Permalink

over whether shares had become of negligible value or had always been of negligible value since subscription. A long letter and a comparison to the graffiti artist who accepted facebook shares as payment of a $5k job done for the (then) fledgling company and HMRC backed down. But I've also chanced my arm on milk quota's bought for c£140k and worth about £400 on cessation of trade. Eventually subsequently sold for about £500 less £250 commission. In that case the slightly peculiar decision in Barker, Harper and Wickes v CIR served to support the HMRC assertion that £400 was not negligible, even on a cessation of trade and against the price paid of c£140k.

 

It certainly seems to be the case that HMRC are increasingly challenging reliefs and exemption (PPR for example) which would, a few years ago, have gone through on the nod. Often with surprising and disappointing outcomes too.

I've been in argument with HMRC on this

hiu612 | | Permalink

over whether shares had become of negligible value or had always been of negligible value since subscription. A long letter and a comparison to the graffiti artist who accepted facebook shares as payment of a $5k job done for the (then) fledgling company and HMRC backed down. But I've also chanced my arm on milk quota's bought for c£140k and worth about £400 on cessation of trade. Eventually subsequently sold for about £500 less £250 commission. In that case the slightly peculiar decision in Barker, Harper and Wickes v CIR served to support the HMRC assertion that £400 was not negligible, even on a cessation of trade and against the price paid of c£140k.

 

It certainly seems to be the case that HMRC are increasingly challenging reliefs and exemption (PPR for example) which would, a few years ago, have gone through on the nod. Often with surprising and disappointing outcomes too.