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Find out more'Can my worthless shares reduce my capital gains tax bill?'
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Samantha specialises in personal taxation and trusts. She enjoys being able to demystify these complex areas.
In 2017, I made some investments that are now worthless because the companies have become insolvent.
I have a rental property, which has a capital gains charge, and had hoped these investment losses could help to reduce my tax liability.
I’ve read that I can only claim losses within the past four tax years. Have I left it too late?
J Barrat, Reading
'Complete losses like yours aren't time limited'
Which? money expert Samantha Galloway says...
The good news is that the four-year limit may not apply in your case.
If you own an asset that is now of negligible value, you can make a negligible value claim (NVC). This treats the asset as having been sold, even though you remain the owner.
This has the same benefits as claiming a loss: you can set the losses against gains to reduce potential bills. But unlike other losses, which must be claimed within four years after the end of the tax year in which you disposed of the assets, there is no requirement to make an NVC within a specified time.
There is no requirement to make a negligible value claim within a specified time
The conditions for making the claim are that you must still own the asset and the asset must have become of negligible value while you owned it.
You also have the option to backdate the claim, up to two years before the start of the tax year in which you make it.
This could help you with the gain from your rental property. HMRC publishes a list of shares declared as being worth negligible value.
- Find out more: Capital gains tax rates and allowances
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