HM Revenue and Customs Brief 41/10
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Issued 11 October 2010
Share Loss Relief - relief for subscriptions by joint owners
or nominees Sections 131 to 151 ITA 2007 (formerly Sections 574 to 576L
This brief explains a change in our practice on relief against
income for capital losses made on shares subscribed for in qualifying
trading companies ('share loss relief'). Our change of practice applies
where individuals subscribe for a joint holding of shares, or subscribe
for shares through a nominee.
If an individual subscribes for shares where
- Enterprise Investment Scheme (EIS) income tax relief is
attributable to those shares, or
- they are shares in a qualifying trading company (as defined
by Section 134 ITA 2007)
and makes a loss on the disposal of those shares, they can
claim to set off that loss against income rather than against capital
Section 250 ITA 2007 permits EIS income tax relief where the
subscription was made by a nominee on behalf of the individual, or
where the subscription was made on behalf of joint owners. In the
latter case the income tax relief is divided equally between the joint
Where EIS income tax relief was not attributable to the shares
there is no equivalent legislation to extend relief to subscriptions by
nominees or joint owners. Previously, we took the view that share loss
relief for such subscriptions was available only where an individual
personally subscribed for shares as a sole subscriber. We did not
consider that relief was available where the subscription was made in
joint names, for example by a married couple. Nor did we accept relief
where the subscription was by a nominee on behalf of a beneficial owner.
Change of practice
We have reconsidered our practice on share loss relief for
shares to which EIS income tax relief is not attributable. We will now
accept claims to relief for losses on the disposal of qualifying shares
where the subscription is made in joint names or through a nominee.
The proportion of the capital loss to be attributed to each
joint owner needs to be determined as a question of fact, typically
based on each owner’s contribution to the cost of the shares.
We are not changing our practice on share loss relief for
shares to which EIS income tax relief is attributable. Share loss
relief was already available for such shares subscribed for in joint
names or through a nominee.
An individual who wants to claim share loss relief must do so
within one year from the normal self assessment filing date for the
year in which the loss occurs. So a claim for a loss made in 2010-11
must be made by 31 January 2013.
This means that claims can still be made for share loss relief
in respect of joint subscriptions or subscriptions through nominees for
2008-09 and later years. Claims for 2008-09 must be made by 31 January
Claims to share loss relief are usually made in a self
assessment return. Where a claim can now be made because of this change
of practice it can be included in a self assessment return that has not
yet been submitted. Or returns that have already been submitted but are
within the time limit for amendment may be amended.
In addition where there is an open enquiry into an existing
claim to share loss relief for any tax year, including years before
2008-09, that claim can be settled in accordance with this change of
We will update the guidance in the Venture Capital Manual at
VCM45000+ to reflect the new practice.
Please send any enquiries about this brief to:
HM Revenue &Customs
Charity, Assets & Residence
Capital Gains Technical Group
2-6 Homer Road
Email: Alan Welsby
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Article Published/Sorted/Amended on Scopulus 2010-10-18 13:53:43 in Tax Articles