In Richard Steven Ward v HMRC [2017] TC05919 HMRC incorrectly disallowed a negligible value claim: it was sent by email and poorly worded.

In order to make a negligible value claim (NVC) the relevant asset must be owned by the taxpayer at the time when its value becomes negligible. The test is an objective one, which is applied at the time the claim is made (more specifically, when the letter or tax return in which the claim is made is received by HMRC).

  • In 2010/11 the taxpayer's Company went into liquidation.
  • On 12 May 2011, the shares were finally disposed of [we assume that the liquidation concluded] and immediately prior to this the taxpayer emailed HMRC to notify them of the NVC enclosing a postponement application. 
  • The taxpayer included NVC set against income on his SA return for 2010/11, filed on 27 January 2012
  • HMRC took the view that the NVC had not been quantified and claimed by 12 May 2011 and as the return was filed when he no longer held the shares he could not include the claim on his return.
  • It amended the Return to exclude the NVC and charged a penalty on the basis the taxpayer had failed to take reasonable care
  • The taxpayer appealed
  • HMRC reviewed the decision and upheld it
  • The question before the FTT was whether the email on 12 May 2011 made and quantified the NVC

The FTT found that HMRC had acknowledged the email claim and this was not drafted clearly. It held that:

  • Although the email did not make explicit reference to a NVC it was clear that the taxpayer was referring to the share loss claim
  • The figures in the postponement application quantified this claim
  • The appeal was allowed in full


Much time and money could have been saved if the taxpayer had made a clear claim and stated what was happening in the original email. 

External links

Richard Steven Ward v HMRC [2017] TC 05919


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