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Negligible value claim did not satisfy the requirements for a valid claim

By Mark McLaughlin, July 2023

A ‘negligible value’ claim submitted by accountants on the taxpayer’s behalf did not satisfy the statutory requirements for a valid claim and the First-tier Tribunal allowed HMRC’s application for the taxpayer’s appeal to be struck out. 

In his tax return for 2015/16, the appellant claimed a capital loss of £200,000 (under TCGA 1992, s 253) in respect of a loan to a Sierra Leone company (Company). On 6 September 2018, during an HM Revenue and Customs (HMRC) enquiry into the tax return, the appellant’s accountants (on his behalf) wrote to HMRC explaining that the loan had been converted into shares in a British Virgin Islands company (Group), the parent company of Company in July 2009 and that the appellant’s capital contribution for the shares was £250,000 (i.e., £200,000 payment for the loan and £50,000 plant and machinery given to Company). 

HMRC replied to the accountants on

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