Time has flown by and we are now four years on from the start of the recession and the close collapse of some financial institutions. This time period is important for individuals who have incurred a loss on their investments because the time limit for claiming certain capital losses is four years from the end of the tax year in which you made the loss. Therefore if you made a loss in 2008-09 you must make the claim by 5 April 2013.
Put simply, if you still own an asset and during your ownership of that asset it now has a value of next to nothing, you may make what is known as a negligible value claim. A negligible value claim treats you as having sold the asset and immediately reacquired it at the time the claim is made for an amount equal to its value. If you make a negligible value claim during the tax year 2012–13, any loss resulting from the deemed disposal will arise in that year, unless you claim to be treated as if you had disposed of the asset at a time falling in 2010–11 or 2011–12.
You can show losses on your Self Assessment tax return or if you don’t normally complete a Self Assessment tax return, you should claim the loss by writing to HMRC. It is advisable to get guidance before making such a claim, therefore if you would like further information on this or any other matter please do not hesitate to contact the team on 01733 371180.