What is the best way to secure relief as soon as possible

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    Q. I made an investment into a promising fledgling company several years ago. Due to Covid-19, the company has struggled over the last 12 months and has just entered administration. What is the best way to secure relief as soon as possible?

     

    As the shares are likely to be worthless, you can explore the possibility of making a negligible value claim. If the conditions are met, this crystallises the loss on the shares now, rather than needing to wait until the shares are formally cancelled. The advantage of this is that it should secure a loss that can be offset against your general income (assuming the company is an unquoted trading company meeting the requirements), and you can carry this back to the previous tax year. For example, if you make the claim in March 2021, you will be able to amend your 2019/20 return to include the loss claim. You can read more about negligible value claims and income losses on Helpsheet 286.

    in Monthly Tax Q&A
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