CG13130 - Assets lost/destroyed/negligible value: quoted shares
Shares and Assets Valuation are responsible for determining
whether quoted shares were of negligible value at the relevant
date(s). Shares and Assets Valuation periodically provide details
of quoted shares that they have accepted are of negligible value to
the publishers of Extel (see CG59520 - CG59525), and details are
then included in Extel. You may accept that quoted shares are of
negligible value when this is shown by Extel. If you receive a
negligible value claim in respect of quoted shares that
- are not listed as being of negligible value in Extel, or
- are claimed to have been of negligible value at a date earlier than that shown in Extel,
you should send a form CG29 to Shares and Assets Valuation, see
CG59517. Remember that when using Extel it is important to check
the latest cumulative supplement. If the claim is to treat the
shares as if they had been sold on a date before that on which the
claim was made you should ask Shares and Assets Valuation to
consider the value of the shares on both dates, see CG13122 and
CG13126.
If a taxpayer asks whether some quoted shares are accepted as
being of negligible value you should check what information is
given in Extel. It may be that
- Extel does not show that the shares have been accepted as being of negligible value, or
- the taxpayer considers the shares were of negligible value on a date before that shown in Extel.
In either event a taxpayer who considers that the necessary
conditions for a negligible value claim are met may, of course,
make such a claim irrespective of the information shown by Extel.
The absence of an entry in Extel does not mean we do not accept
that the shares were of negligible value. It could simply be that
no claim has been made and that Shares and Assets Valuation have
not considered whether the shares were of negligible value.
An entry in Extel only applies to the acceptance that shares
are of negligible value at the time shown. It does not apply to
other aspects, such as:
- Whether the shares became of negligible value so that the negligible value claim succeeds (see CG13133), or
- The amount of any allowable loss that results from the negligible value claim (and any notice given under TCGA 1992/s16(2A) and when you need to refer valuations to Shares and Assets Valuation in calculating the amount of a loss once it is established when and how shares were acquired.
Shares and Assets Valuation do not consider whether shares were
of negligible value before a claim is made establishing the dates
on which valuations are needed. The taxpayer's inspector will ask
Shares and Assets Valuation whether the shares were of negligible
value if necessary when enquiring into any claim that is made.
Alternatively the taxpayer can ask for a post transaction valuation
check after the claim has been made and before the return showing
the loss arising from the deemed disposal is filed, see CG16601.
You may accept that the post transaction valuation check is made
after the claim is made if form CG34 is submitted at the same time
as the claim. CG13128 refers to the guidance on the procedure for
making claims.
Example
Mrs A holds 100 shares in Company Y. On the 9 September in a
tax year she writes to her officer of Revenue and Customs stating
that each share is worth £0 and that the shares have thereby
become of negligible value. Mrs A includes form CG34 with her
negligible value claim (or at a later date before the return for
the year is filed) as she intends to claim a capital loss in her
return for the year. Later her officer of Revenue and Customs
informs her that the shares are of negligible value and the
consideration for the deemed disposal is agreed at £0 (note
that no comment is made about whether the negligible value claim is
successful). Mrs A submits her return for the year, issued after
the year for which the negligible value claim was made, in the
following tax year and includes the deemed disposal of the shares
and her claim for an allowable capital loss on the disposal of
those shares.
