HMRC values Carillion shares as worthless

HMRC recently agreed that securities such as shares in Carilion PLC are considered worthless (i.e. have “negligible value”) as of 15 January 2018. So if you own shares, etc, in Carillion you can now claim a capital gains tax loss for 2017/18 that is equal to the price you paid for them. You may make this claim even if you still hold the shares.

Consider the most efficient time to claim

It might not be tax efficient for you to claim the loss for 2017/18. For example, if your capital gains for 2017/18 equal zero or are below the annual exempt amount (currently set at £11,700). In addition, if a capital loss reduces the amount of gains to below the annual exempt amount, it will also not be fully tax efficient.

If you are in this situation for tax year 207/18, you can defer the claim to a later year

But watch out…

Once the firm’s liquidation is complete, the shares, etc. will be cancelled. HMRC treats this scenario as if you had sold the shares for whatever the liquidator pays you. Most, if not all, shareholders are therefore likely to receive nothing. The losses you make as a result are treated as arising when you are paid by the liquidator. If you receive no payments, the losses are treated as arising when the shares are cancelled.

So don’t leave it too late to claim

Carillion update link: Further information for employees, sub-contractors, creditors and suppliers is available from the Government website.