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Where Taxpayers and Advisers Meet

Reclaiming overpaid CGT

Posts: 2
Joined: Thu Oct 01, 2015 8:09 pm

Reclaiming overpaid CGT

Postby markeuro » Fri Oct 02, 2015 11:10 am

Hi. First time poster here looking for advice concerning CGT payments. I worked for a company for many years and built up a reasonably substantial shareholding over that time through various sharesave schemes and staff offers. In 2013 just before the company got into financial distress I managed to sell approximately one third of my holding which resulted in a substantial capital gain on the average price that I paid for them over the years. However it soon became apparent that the companies troubles were a lot more severe than the management had admitted and it was soon apparent that the remaining shares that I had would probably be completely wiped out. Unfortuantely as these were shares in a private company they were not traded shares and were only saleable back to the company , who had no cash to buy them back. Instead of declaring bankruptcy at that time they ended up in a virtual bank administration from late 2013 until now and the shares were suspended with no value declared - they said it was impossible to value them given the financial mess that the company was in. So I had a substantial CGT for the 2013 tax year but no 'neglible value' declaration on the rest of my shareholding on which to offset the gain. I thought long and hard about not declaring the CGT to HMRC but was advised by our in house tax adviser at the time that I should declare the CGT gain and ended up paying quite a large tax bill on them in early 2014. The company remained in distress through 2014 and 2015 and finally have announced to the shareholders that they can consider the shares to have 'negligible value'. So I have a large capital loss in this tax year but without any corresponding gains to put it against , having already paid a CGT on the same shares last year. My question is can I reclaim the tax I paid , can anyone offer me any advice on this ?

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: Reclaiming overpaid CGT

Postby section 44 » Fri Oct 02, 2015 1:44 pm

having already paid a CGT on the same shares last year
I thought you paid CGT on shares in the company which sold for a profit, not the shares in respect of the negligible value claim?

I'm confused

Posts: 2
Joined: Thu Oct 01, 2015 8:09 pm

Re: Reclaiming overpaid CGT

Postby markeuro » Fri Oct 02, 2015 3:41 pm

Sorry if I wasnt clear. I sold approx 33% of my shares back to the company in late 2013 after hearing some negative news from around the group ( it was a multinational company with offices all over the world ). These shares had been bought at a much lower average cost than the sale price and therefore I had a large capital gain on those in that tax year. However some weeks after my sale the shares were suspended from trading and the company declared that a realistic value for them could not be established. So lets say that I had in broad terms a gain on the shares that I'd sold of £100k but a loss on the ones that I'd not sold of £250k , in other words a large overall loss. As the company refused to state that its shares were of 'negligible value' for the last two years whilst their various financial problems unravelled I was sitting on a big loss but having already paid the CGT for the 2013 tax year on the ones that I managed to dispose of. So that was my question , does anyone know if that CGT can be reclaimed back from HMRC two years after having paid it now that the remaining shares have finally been declared to be of negligible value ?

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Re: Reclaiming overpaid CGT

Postby wamstax » Sat Oct 03, 2015 2:17 am

I am afraid that "negligible value" losses realised after the 2013 tax year cannot be set back to an earlier year. However have you thought about trying to establish that the remaining shares were of negligible value before 5th April 2013 (whether or not the company called them negligible).
regards and hope this helps
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Re: Reclaiming overpaid CGT

Postby King_Maker » Sat Oct 03, 2015 10:53 am

I assume CGT not Income Tax is the correct treatment for your share disposals - e.g. not acquired via your employment.

Generally, capital losses have to be carried forward and deducted from future capital gains.

However, if the loss (including Negligible Value claims) arose in respect of shares subscribed for in an unquoted trading company, then it can be set against Income Tax - either the year of loss or the previous tax year.

As wamstax has said, you need to see if there is an earlier date for negligible value - early 2014 onwards is likely to be the earliest.

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