What are negligible value claims for shares and why do they matter to you?
Have you purchased shares in a company which have ended up being worthless whilst you have owned them? If yes, you may be able to make a negligible value claim.
You can make a claim to HMRC to crystallize the loss. This can be used to offset against other taxable gains in the same or future years.
HMRC publishes a list of public companies where this is possible, and this was updated on 19th February 2024 to include the latest companies which have gone into administration. You can find the updated Negligible Value Agreement list here.
What conditions are required to make a negligible value claim?
- The claim must be for a chargeable asset. A chargeable asset is a possession that you would normally pay Capital Gains Tax on if it increased in value and you sold it for a profit.
- The asset must still be owned when the claim is made.
- The asset must be of negligible value.
What claims won’t be supported?
Negligible value claims will not be supported where the asset held is not completely worthless. Claims where the asset is of a much lower value than when originally purchased will be rejected.
What is the time limit for making a claim?
You can make a negligible value claim for an asset which became worthless up to 2 years prior to the start of the tax year in which you make the claim.
Summary
With so many companies going under recently such as The Body Shop and Debenhams, there may be people who own shares but do not know there may be tax relief available. If you would like help to check if you are eligible for a negligible value claim or to make the claim itself, get in touch with our specialist team here at Maynard Johns.
Please be advised this information is an overview of making a negligible value claim and is correct at the time of writing. We always advise you to take professional advice to ensure you make the most of any tax relief available.