Government wealth warning
If someone tries to persuade you to invest in shares which will magically reduce your tax bill, would you believe them? You shouldn’t, because the scheme is quite likely to be a scam. HMRC has recently warned about such schemes on the tax avoidance area of its website.
If you invest in shares in an unquoted trading company, which later fails, you can claim tax relief for the value of the investment you’ve lost. However, you must have subscribed for the shares, not bought them from someone else. The company must have run a genuine trade and also meet a number of other conditions relating to its size and the nature of its business.
In one share loss relief scheme being marketed, shares are offered in a company that never genuinely carries on a commercial trade. Also the investor isn’t required to put up the full value of the amount claimed to have been lost, providing the balance as ‘loans.’
If you have doubts about any tax relief tied to making an investment, please ask us before committing your money.