Year-end tax planning
Generally, a taxpayer can only claim a capital loss in respect of an asset where that asset has been subject to disposal or has been destroyed completely.
If the asset has simply become worthless (of negligible value), but continues to exist and be held by the taxpayer, there is no capital loss under the normal rules, but a claim may be made as described in this guidance note. Negligible value claims are most commonly made in relation to shareholdings, although other types of assets are considered below.
For other commentary on assets becoming of negligible value, see Simon鈥檚 Taxes C1.321.
Negligible value claim
The taxpayer may make a claim under TCGA 1992, s 24(2)(a) for an asset, which they own at the time of the claim, to be treated as having been sold and immediately reacquired at the value specified in the claim. The amount specified will normally be the market value of the asset and, in many instances, that value will be zero.
The reason behind the negligible value claim is to allow a taxpayer to
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