Capital Gains Losses on Shares

[scenicroute]

Could you please give me advice on a tricky situation I am in . Basically its regarding Shares that I purchased back in 2001. The two companies that I took out the shares in was, "X", which has since been listed on the Inland Revenue website as being of "Negligible Value" and "Y" which was listed on AIM . Either way I lost money. The X shares are now worthless £0.00 since the company failed, and shares purchased in Y were disposed off as they too had no value. The sum in question for the two companies originally invested in, were, "X £1,800 and Y £1,200 making a total of £3,000 lost.

Would I be correct in thinking that the loss of £3,000 in question, could be offset against my income for the tax period 2003-2004 if I make a claim for "Negligible Value Relief "or have I been misled. I am not entirely convinced that I have been given the correct advice from other people, thats why I've decided to write this letter to you for your opinion, explaining the situation.

Some advisers have suggested filling in form R40 (CG) along with the Short Tax Return, declaring my losses, whilst others have told me to send a letter to my tax office explaining/declaring a loss on the matter in question. I hope this letter explains the situation I am in, in order for you to give me advice on what actions to take.

PS One other matter

My employers have recently introduced car parking permits in which we pay £ 5.00 a month. Now is it possible to claim this in my short tax return under "Claim for allowable expenses" in employment


Many thanks

[James Smith]

Scenic Route,

Whilst your are almost there, what you canÂ’t do is offset capital losses against your regular income. As far as I am aware these losses can only be utilised against future gains. You should however declare them as they can be rolled forward indefinitely.

It is irrelevant whether you fill in a R40 or send a letter to notify of your losses. You will have to put the information “freeform” in the additional information box on the R40.

You parking is not an allowable deduction.

Regards,

James Smith
Chartered Accountant
www.jamesesmith.co.uk
01284 764436