Sam Hart looks at circumstances in which a loss claim can be made without disposing of an asset, and where a loss could be used to greater effect against income.
Capital losses are an uncomfortable subject for many clients, for obvious reasons. However, while losses happen, navigating misunderstandings around when a negligible value claim can be made, and when the loss can be claimed can be key, and poor timing or structuring can permanently restrict relief.
What is a negligible value claim?
Much like it says on the tin, a negligible value claim arises where an asset has become of negligible value but, crucially, has not actually been disposed of. In simple terms, the asset still legally exists but has lost almost all its economic worth. For shares, this often occurs when a company is insolvent, has ceased trading, or has no realistic prospect
