{"id":5992,"date":"2025-11-12T13:24:30","date_gmt":"2025-11-12T13:24:30","guid":{"rendered":"https:\/\/well-tax.com\/?p=5992"},"modified":"2025-11-18T11:52:36","modified_gmt":"2025-11-18T11:52:36","slug":"como-funciona-la-deduccion-por-perdidas-de-participaciones-y-cuando-puede-solicitarse","status":"publish","type":"post","link":"https:\/\/well-tax.com\/es\/making-sense-of-share-loss-relief-how-it-works-and-when-you-can-claim-it\/","title":{"rendered":"La deducci\u00f3n por p\u00e9rdidas de participaciones: c\u00f3mo funciona y cu\u00e1ndo puede solicitarse"},"content":{"rendered":"\n
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When investing in small companies, there\u2019s always an element of risk, especially if the company is unquoted or in the early stages of development. But what happens if that investment does not go to plan and the value of your shares crashes to zero? The good news is that UK tax law offers a relief mechanism for this situation: Share Loss Relief.<\/p>\n\n\n\n

In this article, we\u2019ll explain what Share Loss Relief is, when you can use it, and how to maximise its benefits\u2014whether you\u2019re based in the UK or are a cross-border investor navigating both.<\/p>\n\n\n\n

What Is Share Loss Relief?<\/h2>\n\n\n\n

Share Loss Relief is a tax provision that allows individuals who have made a loss on shares to claim that loss against their income, not just against capital gains.<\/p>\n\n\n\n

This is significant because income tax rates are usually higher than capital gains tax (CGT) rates. So, by setting a share loss against your income, you could reduce your tax bill more effectively.<\/p>\n\n\n\n

There are two common scenarios where this relief can apply:<\/p>\n\n\n\n

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  1. You dispose of your shares and make a capital loss.<\/li>\n\n\n\n
  2. Your shares become effectively worthless (but you haven\u2019t sold them), and you make a Negligible Value Claim.<\/li>\n<\/ol>\n\n\n\n

    Let\u2019s explore both.<\/p>\n\n\n\n

    The Negligible Value Claim: Claiming a Loss Without Selling<\/h2>\n\n\n\n

    If the company you invested in has collapsed, gone into liquidation, or is insolvent, your shares may now be of negligible value. That means they are worth next to nothing.<\/p>\n\n\n\n

    In such cases, you don\u2019t need to sell the shares to realise a loss. Instead, you can make what\u2019s called a Negligible Value Claim under section 24(2) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992). This treats the shares as being sold and immediately repurchased at their negligible value, which results in a tax loss.<\/p>\n\n\n\n

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    What qualifies as “negligible value”?<\/h2>\n\n\n\n

    There\u2019s no strict statutory definition, but HMRC guidance suggests that “negligible” means “worth nothing or next to nothing”. Think insolvent companies, or those with no prospect of recovery. HMRC also publishes a list of companies it accepts as having become negligible in value (mainly quoted shares), but this list isn\u2019t exhaustive.<\/p>\n\n\n\n

    Using the Loss Against Income<\/h2>\n\n\n\n

    Once a loss is crystallised via a disposal or a negligible value claim, you can potentially set it against your income, which is where Share Loss Relief comes in.<\/p>\n\n\n\n

    To qualify, the shares must be in a qualifying trading company and must have been subscribed for directly by you (not bought second-hand). If the shares were eligible for EIS (Enterprise Investment Scheme) or SEIS (Seed Enterprise Investment Scheme) relief, you’re even more likely to qualify.<\/p>\n\n\n\n

    How Much Relief Can I Claim?<\/h2>\n\n\n\n

    This is where it gets technical, but important.<\/p>\n\n\n\n

    You can set the capital loss against:<\/p>\n\n\n\n

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    • Your income for the same tax year as the loss (ITA 2007 s.131).<\/li>\n\n\n\n
    • Or your income for the previous tax year (ITA 2007 s.132).<\/li>\n<\/ul>\n\n\n\n

      If the shares don\u2019t qualify under EIS\/SEIS, there are limits:<\/p>\n\n\n\n

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      • You can claim relief for the lower of \u00a350,000 or 25% of your adjusted total income.<\/li>\n<\/ul>\n\n\n\n

        If they do qualify, the amount is unlimited.<\/p>\n\n\n\t\t

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