What is a negligible value claim?

Source: HM Revenue & Customs | | 05/11/2019

A negligible value claim is a claim made by a taxpayer when an asset they own has become of negligible value, i.e. it is worthless or worth next to nothing. The taxpayer effectively treats the asset as having been disposed of and then immediately reacquired at the negligible value. The asset must still be owned by the person making the claim and must have become of negligible value whilst it was owned.

Making a claim allows the owner of the asset to realise a capital loss in respect of an asset without actually having to dispose of it.

By making a negligible value claim, rather than selling an asset, the taxpayer retains ownership and may benefit should the asset ever recover in value; even if this is only a remote possibility.

HMRC publishes a list of shares or securities, formerly quoted on the London Stock Exchange, that have been officially declared of negligible value for the purposes of making a claim. In other cases, an application should be made to HMRC to agree a valuation.

A negligible value claim can be back-dated to an earlier time falling in the previous two tax years provided all the other qualifying conditions are met.



 

Latest News

Changes to CJRS – Employer costs
02/06/2020 - More...
HMRC’s guidance on the Coronavirus Job Retention Scheme has been updated a number of times as the workings of the scheme evolve. The most recent update, on 29 May 2020,

Eligible for extended self-employed scheme?
02/06/2020 - More...
The Chancellor has confirmed that the Self-Employment Income Support Scheme (SEISS) is to be extended for a final three-month period to 31 August 2020. The maximum grant for the

Certain retail outlets given green-light to re-open
02/06/2020 - More...
The government has started the slow process of reopening selected businesses as we continue to face restrictions in almost all aspects of daily life. The reopening of retail

Search


Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login