Capital Loss on AIB & Irish Life Shares
- Thread starter Nick1911
- Start date
Brendan Burgess
Founder
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You have to sell the shares and the loss will be the difference between what you paid for them, and the proceeds of the sale.
Brendan
Brendan
It certainly applies that Anglo shares are worthless but I found this on the Revenue website
[19.1.9] Disposals where assets lost or destroyed or
become of negligible value (S.538)
9.6 As stated in Tax Briefing 52 the word ‘negligible’ is not defined for the
purpose of the Capital Gains Tax Acts and therefore takes its normal
meaning, i.e. not worth considering; insignificant. The concept of
negligible value is not comparative in nature. A dramatic fall in the value
of shares, e.g. due to the volatile nature of the sector in which it operates,
would not give rise to a negligible value claim where the company
continues to operate and its shares continue to be traded. For example,
shares purchased for €10M would not be regarded as having negligible
value by virtue of their value decreasing to €100,000. Clearly €100,000 is
not a negligible amount. Revenue does not accept that the legislation is
intended to be applicable in these circumstances particularly where there
would be a ready mechanism available to the shareholder to dispose of
the shares. Section 538 is not intended to be a provision for making losses
available on an artificial basis in circumstances where there would be no
impediment to their actual disposal in the market place. In applying the
provisions of this section the inspector will look to the specific facts in
ascertaining if the value of the asset has become negligible. In the case of
shares, for example, a claim will only be considered where the inspector
is satisfied that they are effectively worthless. Persons claiming relief
under this section should provide their inspector with full details,
supported by relevant documentation, of the circumstances in which the
relevant asset has become of negligible value.
and further
[19.1.6] Disposals where capital sums derived from assets (S.535)
6.1 Section 535 (2) specifically includes as disposals for Capital Gains Tax
purposes the following occasions:
...
(c) There is also a disposal where, by way of a claim, the owner of an asset
satisfies the Inspector that the value of the asset has become negligible.
In this case, the asset is deemed to have been sold and immediately
reacquired at its market value (see, however, Tax Instruction 19.1.9
Par.1).
So it is possible to argue that the shares have negligible value but that would depend on the number and value of each share
[19.1.9] Disposals where assets lost or destroyed or
become of negligible value (S.538)
9.6 As stated in Tax Briefing 52 the word ‘negligible’ is not defined for the
purpose of the Capital Gains Tax Acts and therefore takes its normal
meaning, i.e. not worth considering; insignificant. The concept of
negligible value is not comparative in nature. A dramatic fall in the value
of shares, e.g. due to the volatile nature of the sector in which it operates,
would not give rise to a negligible value claim where the company
continues to operate and its shares continue to be traded. For example,
shares purchased for €10M would not be regarded as having negligible
value by virtue of their value decreasing to €100,000. Clearly €100,000 is
not a negligible amount. Revenue does not accept that the legislation is
intended to be applicable in these circumstances particularly where there
would be a ready mechanism available to the shareholder to dispose of
the shares. Section 538 is not intended to be a provision for making losses
available on an artificial basis in circumstances where there would be no
impediment to their actual disposal in the market place. In applying the
provisions of this section the inspector will look to the specific facts in
ascertaining if the value of the asset has become negligible. In the case of
shares, for example, a claim will only be considered where the inspector
is satisfied that they are effectively worthless. Persons claiming relief
under this section should provide their inspector with full details,
supported by relevant documentation, of the circumstances in which the
relevant asset has become of negligible value.
and further
[19.1.6] Disposals where capital sums derived from assets (S.535)
6.1 Section 535 (2) specifically includes as disposals for Capital Gains Tax
purposes the following occasions:
...
(c) There is also a disposal where, by way of a claim, the owner of an asset
satisfies the Inspector that the value of the asset has become negligible.
In this case, the asset is deemed to have been sold and immediately
reacquired at its market value (see, however, Tax Instruction 19.1.9
Par.1).
So it is possible to argue that the shares have negligible value but that would depend on the number and value of each share