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bigduckontax, Accountant
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My wife owns shares in a company quoted on Aim (Albemarle on

Customer Question

My wife owns shares in a company quoted on Aim (Albemarle on Bond). On 20th August, she was notified that “The Company’s Shares were placed into Administration on 25th March 2014”. On 31st August, she wrote to HMRC to declare a capital loss.
HMRC advised that the loss arose in 2013/2014 and maintained this line when she challenged it.
I understood (HMRC Helpsheet 286) that, as a loss resulting from the deemed disposal of shares, the loss should arise in 2014/15.
She would benefit by taking the loss in 2014/15. Should she pursue the case? If so, how?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
In my opinion the line taken by HMRC is typical of their lack of understanding of the situation. The date of administration is irrelevant, the date of the shares being declared worthless (ie of nil value) by the authorities gives the tax year applicable in which the loss should be claimed. However, we are splitting hairs here. It all depends on the full gain or loss situation suffered by your spouse in 13/14 as, if she has only this loss it can be claimed and carried forward to future years to offset gains over the Annual Exempt Amount in 14/15 et seq. It is possible, regrettably, for losses to be irrecoverable which makes the definition of the year of loss essential to get correct.
I do hope I have thrown some light on her situation over this regrettable loss. Personally I have a handful of worthless share certificates from my trading days which I am always thinking of having framed as a montage, but maybe I'm getting too old to care anymore!
Customer: replied 2 years ago.

Keith

Thanks for this.

If she takes the loss in 13/14, she can only carry forward a fraction of it. If she takes it in 14/15, she can use all of it. How should she progress the matter?

Simon

Expert:  bigduckontax replied 2 years ago.
Well Simon, firstly she must determine the date of the shares being declared worthless. If this is in the 13/14 tax year then, as you suggest, she may loose some of her loss. If it is in the 14/15 year then her position would be better and she can claim the loss on her annual self assessment tax return. You see how we are stuck here without this date which may, regrettably, be the same day as the company was placed in administration. HMRC might be right if the dates are indeed the same.
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Customer: replied 2 years ago.

Keith

I am sorry to labour this but she needs to know how to progress. The key question is "how does she find out when the shares were declared worthless?"

Expert:  bigduckontax replied 2 years ago.

That will be declared by the London Stock Exchange if the Australian shares have a Lon***** *****sting. Failing that the declaration falls to the Sydney Exchange or the Australian tax authorities.

Customer: replied 2 years ago.

These listed on AIM, not the Australian exchange

Expert:  bigduckontax replied 2 years ago.
Then AIM will be able to assist.
Expert:  bigduckontax replied 2 years ago.
Here is the Gov UK advice on this matter:
https://www.gov.uk/negligible-value-agreements-to-30-june-2014
Only three shares have been so far declared in the current tax year.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3365
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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