What loss relief is available when assets become worthless, lost or destroyed? 

Subscribers see Loss relief (Income Tax) disposal of shares and CGT: Relief for loans to traders.

This is a freeview 'At a glance' guide to loss relief for loans and shares.

Where an asset becomes worthless, is lost, or destroyed it is generally possible to claim loss relief on the cost of the asset.

  • For some assets such as shares, there may be a choice as to whether the loss claim is made under Capital Gains Tax (CGT) rules, or Income Tax rules.
  • Loss relief for CGT is given by section 24 TCGA 1992.
  • If the asset consists of shares subscribed for in a private or AIM-listed company or Enterprise Incentive Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) company, the loss as calculated for CGT may alternatively be claimed against income (section 131 ITA 2007).

See Loss relief (Income Tax) disposal of shares

If the asset was a loan made by a person to a business (this includes a company, as well as any sole trade or partnership) and it becomes irrecoverable, they may claim CGT loss relief under section 253 TCGA 1992.

See CGT: Date of acquisition or disposal for details of relief in cases of the entire loss, destruction, dissipation or extinction of an asset occurs. This might include where a building is demolished. 

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