What is the negligible value claim for worthless assets?
Answered 11 March 2026
Here is a comprehensive answer on negligible value claims for worthless assets.
Negligible Value Claims for Worthless Assets
What the law says
The statutory basis for negligible value claims is TCGA 1992, s.24.
Entire loss or destruction (s.24(1)): The entire loss, destruction, dissipation or extinction of an asset constitutes a disposal for CGT purposes, whether or not any capital sum is received.
Negligible value claim (s.24(2)): Where a claim is made, the Act applies as if the claimant had sold and immediately reacquired the asset at the time of the claim (or an earlier specified time) for a consideration equal to the value specified in the claim.
Who can claim (s.24(1A)): A negligible value claim may be made by the owner of an asset ("P") if Condition A or B is met:
- Condition A (s.24(1B)): The asset has become of negligible value while owned by P.
- Condition B (s.24(1C)): The disposal by which P acquired the asset was a no gain/no loss disposal; the asset was of negligible value at the time of that disposal; and each other disposal of the asset between when it became of negligible value and P's acquisition was also a no gain/no loss disposal.
Backdating the claim (s.24(2)(b)): An earlier time may be specified in the claim if:
- the claimant owned the asset at the earlier time;
- the asset had become of negligible value at the earlier time; and
- for CGT purposes, the earlier time is not more than two years before the beginning of the year of assessment in which the claim is made; or
- for corporation tax purposes, the earlier time is on or after the first day of the earliest accounting period ending not more than two years before the time of the claim.
Key condition — asset must "become" worthless: An asset that is already of negligible value at the time of acquisition cannot satisfy Condition A, since it cannot "become" of negligible value while owned by P. This was confirmed in a First-tier Tribunal decision where shares allotted to the appellant were already of negligible value on the date of allotment, meaning Condition A in s.24(1B) was not met and the claim failed.
HMRC guidance / practice
Effect of a successful claim: A successful negligible value claim results in the claimant being treated as if the asset had been sold and immediately reacquired for its negligible value. If this produces a capital loss, the claimant must separately notify that loss to HMRC in order for it to be an allowable loss — though the claim and loss notification may be submitted together in the same return, letter or document.
Cryptoassets — individuals: For tokens held in a section 104 pool, the negligible value claim must be made in respect of the whole pool, not individual tokens. The claim must state: (1) the asset subject to the claim; (2) the amount the asset should be treated as disposed of (which may be £nil); and (3) the date of the deemed disposal and immediate reacquisition. The resulting loss must be reported to HMRC.
Cryptoassets — businesses and companies: The same pooling rule applies. The claim must state the asset, the disposal amount (which may be £nil), and the date of deemed disposal. The loss must be reported to HMRC.
Theft: HMRC does not consider theft to be a disposal, as the owner retains legal ownership and a right to recover the asset. Victims of theft therefore cannot claim a capital loss. However, if tokens are actually received and subsequently become worthless, a negligible value claim may be possible — but not if the tokens were worthless at the point of acquisition.
Valuation: HMRC's Shares and Assets Valuation (SAV) team may be asked to opine on value at the date of the claim, on acquisition, or at 31 March 1982. If the claimant specifies an earlier date, SAV must consider whether the asset was of negligible value on that earlier date as well as on the date the claim was made.
Specific asset types: HMRC's Capital Gains manual provides further guidance at CG13140–CG13150 (shares), CG13137 (buildings and structures), CG28000 (partnership goodwill), CG68080 (goodwill), and CRYPTO22500/CRYPTO41450 (cryptoassets).
Citation sources
Part II General Provisions relating to computation of gains and acquisitions and disposals of assets Chapter II Assets and disposals of assets General provisions Disposals where assets lost or destroyed, or become of negligible value. 24 1 Subject to the provisions of this Act and, in particular to sections 140A(1D), 140E(7) and 144 , the occasion of the entire loss, destruction, dissipation or extinction of an asset shall, for the purposes of this Act, constitute a disposal of the asset whether
As with other types of assets, businesses and companies can crystallise losses for exchange tokens that they still own if they become worthless or of ‘negligible value’. A negligible value claim treats the exchange tokens as being disposed of and re-acquired at an amount stated in the claim. As exchange tokens are pooled, the negligible value claim needs to be made in respect of the whole pool, not the individual tokens. The claim will need to state the: asset which is the subject of the claim a
HMRC does not consider theft to be a disposal, as the individual still owns the stolen asset and has a right to recover it. This means victims of theft cannot claim a loss for Capital Gains Tax. Individuals who contract to acquire tokens but then do not receive the tokens they have paid for may not be able to claim a capital loss. Individuals who contract to acquire tokens and do actually receive tokens, may be able to make a negligible value claim to HMRC if those tokens become worthless. If th
A successful negligible value claim simply results in the claimant being treated as if the asset that is the subject of the claim had been sold and immediately reacquired for its negligible value. If, as a result of a satisfactory negligible value claim, there’s a capital loss, it is necessary for the claimant to notify that capital loss to HMRC in order for it to be an allowable loss. This notice needs to be given in addition to a negligible value claim, although the two things may be sent to
You will usually only require a valuation at this date if the disposal and acquisition were by connected persons (see CG14530+), or the transaction was otherwise than by way of a bargain at arm's length (see CG14540+), or there is a negligible value claim under s24(2) TCGA92 (see CG13120 onwards) and the case is not one in which you may accept the figures (see CG13120P). The valuation date is the date on which the taxpayer makes the negligible value claim. If the taxpayer has taken advantage of
As with other types of assets, individuals can crystallise losses for tokens that they still own if they become worthless or of ‘negligible value’ while owned. A negligible value claim treats the tokens as being disposed of and immediately re-acquired at an amount stated in the claim. As tokens are pooled, the negligible value claim needs to be made in respect of the whole section 104 pool, not the individual tokens. The negligible value claim will need to state the: asset which is the subject o
Tribunal considered a not dissimilar case, in that one issue was whether the shares were worthless on the date they were acquired. At [45] the UT referred to “the principle that the asset, in this case the shares, must be valued as it is on the relevant date, and not as it might be if certain steps were taken.” Discussion 38. There was no dispute, and we find, that both enquiries were validly opened and closed. 39. It is common ground that the value of the 150,000 shares, as at the time of their