Q. I made an investment into a promising start up company several years ago. Because of the pandemic, the company has struggled over the last 12 months, and has just gone into administration. What is the best way to secure relief as soon as possible?
A. As the shares are likely to be without any value, you can look at the possibility of making a negligible value claim. If the conditions are met, you’re treated as having disposed of an asset even though you remain the owner. The advantage being 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. The government’s guidance on negligible value claims and income losses offers some helpful information.