Can you claim a CGT loss on the loan notes issued by the Dolphin Trust

[CuriousCork]

A relative of mine invested €100,000 in a loan note issued by the Dolphin Trust. He wishes to claim the loss as a CGT loss against other gains but he has received conflicting advice. One person has told him he cannot claim a loss on a debt. Can he claim a CGT loss on the loan note?

 

[Gordon Gekko]

Who gave the conflicting advice?

A loss in respect of debt on a security is normally allowable, but it can depend.

What does the Prospectus say about potential gains?

 

[CuriousCork]

An experienced investor told him he could not claim the loss, whereas his accountant (who is not a tax consultant) told him he could.

As it was a debt there was no provision for a capital gain. He was supposed to just receive interest.

 

[EasilyAmused]

This may help:

Capital Gains Tax Loss Relief On Converitble Loan Notes | Amorys News

Capital Gains Tax (CGT) | Simple debt is not an allowable Loss for Capital Gains Tax Purposes. What is a ‘debt on a security’? ..read article

amoryssolicitors.com

 

[CuriousCork]

That is useful. As nobody would have paid more than the face value of the notes then he will be unable to use the loss.

 

[tallpaul]

Down a €100K... ouch!! And people get criticised for sticking money in the bank or in savings certs...