Claim Tax Relief as a creditor for unbuilt property?

TheMac

Hi,

I unfortunately made a deposit for an off-plan apartment in Clipper's Quay Manchester from Dylan Harvey Residential (now in liquidation, but Toby Whitaker the MD has simply re-opened as Harley Scott Ltd). This was back in 2008. Suffice to say that all we got in return for our initial deposit was a property reservation form. We have never entered into a contract for entire property because it was never built, they reneged on their promise. They've wound the company up owing about £6.5m to creditors and are under investigation for some dubious "inter-comnpany loans" and swtiching of assets to other companies under the DH Group before winding the company up. It looks increasingly unlikley that creditors will get any money back at all.

Anyhow, it has come to my attention that there is the possibility to claim tax relief from HMRC on our loss, which could result in some or all the losses being used to offset taxation arising from our other income - i.e. our jobs.

I'm in this jointly with my brother. Is there an expert on the forum that may be able to advise on this further?

Thanks for your time and help,

Mac

ceeforcat

Do you and your brother have a property trading business? If not, I cannot see how any losses could be set against other income as you describe. YOu state that this fact 'has come to your attention'. How so?

BoGoF

I can only assume you are referring to a 'negligible value claim' but this only applies to shareholders of an unquoted company. Also applies if you made a loan to a company.

If you have just lost a deposit then that's just tough luck

antrobus

Would the lost deposit be a loss for Capital Gains Tax purposes???

jimmo

TheMac
As ceeforcat said in post #2 unless you and your brother have a property trading business there is absolutely no chance of claiming relief for your lost deposit against Income Tax.
There is a possibility that you can establish a loss for Capital Gains Tax purposes and, whilst such a Capital Gains loss can be carried forward until such time that you have the opportunity to set it against future Capital Gains you might want to consider whether the effort you put into establishing a Capital Gains loss is worthwhile to you.

TheMac

Thanks for the replies so far.

OK, it was brought to my attention by the liquidators CLB Cooper (who were also the administrators beforehand). They have stated this possibility to creditors in a report, but asked that you seek independant advice about it. The wording was- you may be able to claim tax relief from HMRC on the loss in this case, resulting in some or all losses being used to offset taxation arising out of other income or capital.

We don't have a company, we're just two mugs who got take for a ride like a lot of unfortunate creditors who invested in Dylan Harvey residential properties off-plan.

Unfortunately I don't know much more than what they've stated, I was hoping to be able to claw back some losses through this "tax relief" avenue.

ceeforcat

Yes - it was a global letter to all creditors including builders, solicitors, agents and other businesses who would be able to claim such losses.

TheMac

Yes, a report for all creditors as I stated above. It is my view that most of the creditors are not as you described, they are mostly like me who wanted to buy to let.