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When can a negligible value claim be made on private company shares?
When can a claim to loss relief be made for an asset becoming of negligible value? I know that HMRC publishes occasional details of listed shares that it has agreed have become valueless but my client owns shares in a private company. He invested £50 000 about ten years ago and received 10% of the company shares. Unfortunately since then the company has failed to prosper.
In the intervening years losses have exceeded profits and fresh investment has been sought at various points. This has ‘watered down’ my client’s shareholding and he now owns 2.5% of the company. Despite this the client believes that the share values have continued to fall and he now believes that his might be worth about £5 000.
Given these circumstances can I submit a negligible value claim so that the client can benefit from the loss relief or must...
