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15 March 2011
A taxpayer borrowed money to purchase shares in a close company. The shares are now of negligible value and the company is in liquidation. Relief for the interest will continue until the company is struck off or becomes a close investment holding company
Our client borrowed money to purchase shares in a close company. These shares have become of negligible value and a capital loss has been claimed under TCGA 1992 s 24(2) as the company has gone into liquidation and the prospect of recovery to shareholders is nil.
Can our client continue to claim relief for the interest on the loan until the company is actually struck off?
The director/shareholders are thinking of starting another business that would be involved in substantially the same trade. It is likely that this would be carried on via a limited company as before.
If the shares in the liquidated company had been or could still be transferred to or purchased by the new company would that have been beneficial? For example could shareholders have continued to claim tax relief on...
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