Taxation of Chargeable Gains Act 1992 Schedule 7AC paragraph 33

Negligible value claims

Paragraph 33 restricts the ability of companies to backdate negligible value claims for shares where the substantial shareholdings exemption would prevent any resulting loss from being allowable.

• Where a company claims that shares it holds have become of negligible value, and any loss on a disposal at the time of the claim would be disallowed under the substantial shareholdings exemption, the backdating option is restricted.
• The company cannot elect for the deemed disposal and reacquisition to be treated as having occurred at a time earlier than the date of the claim itself.
• This prevents companies from choosing a prior date when the substantial shareholdings exemption might not have applied, thereby creating an allowable loss that would otherwise be blocked.
• The restriction applies equally to interests in shares and to assets related to shares in the company, not just to the shares themselves.