Tax tip: Negligible value claim in a client’s tax return

When a client’s investments fail the client may assume that ‘all is lost’ and that their options from a tax relief perspective are limited perhaps purely to potential capital gains tax relief. Moreover more knowledgeable clients will understand that capital gains losses are only (typically) available against other capital gains. While this may be fine in some situations some clients may not have other assets liable to capital gains tax or even where they do have such assets may have no expectation or plan to dispose of such items for the foreseeable future.

However the good news for taxpayers in this situation is that all is not ‘necessarily lost’ from a tax relief perspective. That is if they have a qualifying asset which has ceased to have any value (or in official parlance has ‘become of negligible value’) one can also always...