Negligible value

We act for two clients who are dairy farmers with milk quota worth ‘next to nothing’. We have formulated negligible value claims on their tax returns to record capital losses to carry forward on the basis that both had capital gains on cottages in the same or subsequent year.

Different articles seem to approve or disapprove this treatment because in some cases a sale and repurchase is required to crystallise the loss and in others the negligible value treatment is supported given that the value of the quota is now insignificant.

Readers’ comments would be much appreciated.

Query 17 941 – Daisy

Reply from Hayloft

TCGA 1992 s 24(1A) notes that a claim may be made where an asset ‘has become of negligible value’ while owned by the claimant.

The term negligible value is not defined in s 24 ...