CGT—assets of negligible value
Produced in partnership with Rebecca Cave of Taxwriter Ltd (Produced by Tolley)
CGT—assets of negligible value

The following Private Client practice note produced in partnership with Rebecca Cave of Taxwriter Ltd (Produced by Tolley) provides comprehensive and up to date legal information covering:

  • CGT—assets of negligible value
  • Negligible value claim
  • Effect of the claim
  • When is the loss effective?
  • Proof required
  • Assets acquired from spouse or civil partner
  • Particular types of asset
  • Shares
  • Buildings
  • Goodwill
  • More...

FORTHCOMING CHANGE: On 14 July 2020, the Office of Tax Simplification (OTS) published its online survey and a call for evidence to seek views about capital gains tax. The call for evidence comes in two sections: the first seeks high-level comments on the principles of CGT by 10 August 2020, while the second and primary section of the document invites more detailed comments on the technical detail and practical operation of CGT by 9 November 2020. Although the results of the survey and consultation are not yet known, it is worth bearing the proposals in mind when considering and advising on CGT.

Generally a taxpayer can only claim a capital loss in respect of an asset where that asset has been disposed of, or has been destroyed completely. If the asset has simply become worthless (ie of negligible value), but continues to exist, there is no capital loss under the normal rules.

Negligible value claim

However, the taxpayer may claim under section 24(2) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) for an asset in their possession and ownership to be treated as having been sold and immediately reacquired at the value specified in the claim. The amount specified will normally be the market value of the asset and in many instances that value will be zero.

While ‘negligible value’ is not defined in the legislation,

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