This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Storage Pod worthless

SteveW1
Posts:3
Joined:Mon Sep 25, 2017 3:13 am
Storage Pod worthless

Postby SteveW1 » Mon Sep 25, 2017 3:29 am

Can anyone advise me please. I was mis sold storage pod of £15,O00 with Store First by an unregulated London Broker. Ignorance is costly! They are being investigated by the Serious Fraud Office and there is a petition in the High Court to wind them up. (Lots on the internet about this).
I suspect they were always a Ponzi scheme. I can't sell my assets and it has produced no income in years. There are hundreds of people like me who have worthless pods that they cannot get rid of yet at present Store First are still trading. Last year i paid CGT Of £27,000 on the sale of a second home that I had owned since the 1990's. Other than that I can't see me making any capital gains as my savings are in a savings account.is there anyway I can offset the loss of the pod against my CGT return of last year. I have proof that no returns from Store First were paid in 2015,16 and 17 and that attempts to sell the pod over the last three years have failed. My concern is that I won't be able to claim anything until Store First is wound up by the courts which could take me beyond any date when I might have been able to make a claim. This is a totally new area for me. If anyone can help I would be grateful. I'm a pensioner with adult disabled children. This was supposed to be a nest egg with promised regular income for them.

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Storage Pod worthless

Postby LozaACCS » Mon Sep 25, 2017 9:06 am

I have had a look on the internet at this, I assume the investment was not made through a pension scheme.
I think the first thing to establish is what exactly did you buy, was it a storage pod which would generate rental income or was it a more complex structure involving a franchise arrangement enabling you to generate property income.
In the former case, the disposal would be that of a wasting chattel which is exempt from CGT (so a loss relief claim could not arise), however on the basis that the storage pod is plant and machinery then any disposal would be chargeable.
You could then make a claim under S24(2)(b) TCGA 1992 to treat the asset as being of negligible value and realise the loss as you suggest.
The problem is that the loss in value must have arisen during the period of ownership so if it was worthless when you bought it, (ie you were conned), then no relief would be available.

SteveW1
Posts:3
Joined:Mon Sep 25, 2017 3:13 am

Re: Storage Pod worthless

Postby SteveW1 » Mon Sep 25, 2017 11:37 pm

Thank you for your reply.
1. The pod was bought to generate income and capital gain. Neither has happened
2. Store First is a company that rents out these pods for self storage and takes a percentage of the
Rent.
3. Store First Guaranteed 2 years of rental income which they stopped paying before the two years
And the strong likelihood of increase rental income after the two years. It never happened
4. They then invoked a break clause after two years as demand for storage had ceased
5. It was a break clause the solicitor acting on my behalf told me nothing about
6. The storage pod is like a secure room. There are hundreds opened by different investors within
a building own by Store first (or so I would assume)
7. I did not buy it through a pension fund and the broker was unregulated and still trading


I am a bit confused by your answer. I wanted to know if I could offset the capital gain on a residential property that I had rented out for a number of years and sold oats year. I won't have made any capital gain on the pod. Forgive me if I have misunderstood the last part of the post.

I also wanted to know how I could prove the pods worthless so I could write off the loss against the capital gain on the house I sold, especially as STORE First are appealing against the Government Regulator and the Serious Fraud office that they should not be wound up. The case has been adjourned - or so I understand but I've no idea why.

Thanks

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Storage Pod worthless

Postby LozaACCS » Tue Sep 26, 2017 8:26 am

Apologies if my post was unclear
What I tried to explain was that a claim can be made when an asset becomes worth "next to nothing" to treat the sale proceeds as nil, the claim thus enables the original cost to be recognised as a loss without an actual disposal taking place, you could then (as you suggest) use the loss against the gain on your property.
The claim can only be made if the loss in value occurs after you acquired it, so if it was worth nothing when you bought it there is no loss to claim.
You might argue that the original value was what you paid for it, HMRC might however take a different view.
You can submit form CG34 to clarify the issue with HMRC.

SteveW1
Posts:3
Joined:Mon Sep 25, 2017 3:13 am

Re: Storage Pod worthless

Postby SteveW1 » Tue Sep 26, 2017 10:41 pm

Thank you. I now understand. Very helpful.


Return to “Capital Gains Tax, CGT”