VCM45250 - VC loss relief: general: valuation of shares and negligible value claims

ICTA88/S574 & TCGA92/S24 (2)

In considering a claim for VC loss relief you will have to establish the amount of the allowable loss the claimant incurred on the disposal of shares in a qualifying trading company. You will often have to ask Shares Valuation to agree the value of the shares in question. Guidance on how to approach Shares Valuation to agree the value of unquoted shares is at paragraphs CG59540 onwards in the CG manual.

Only allowable losses arising from certain types of disposals of shares qualify for VC loss relief, see VCM45800. Frequently the disposal that will lead to a claim for VC loss relief is a deemed disposal because a negligible value claim has been made under TCGA92/S24 (2). You may be able to accept that the shares are of negligible value without obtaining confirmation from Shares Valuation if the conditions in CG13131 are met. But you must ask Shares Valuation to agree the market value if a valuation at the date of issue is required. If the negligible value claim does not fall within CG13131 and you need a valuation at the date of issue, ask for both valuations at the same time.

Depending on the circumstances of the case, you should also consider whether the negligible value claim is valid at all. A claim under TCGA92/S24 (2) may only be made if the asset has become of negligible value, see CG13133. If the shares were of negligible value when they were issued, they will not have become of negligible value so no claim under TCGA92/S24 (2) can be made.