Capital losses (CVA) on Debenture held in Abundance Investments

TJ666

I'd just like to run this past the helpful people here.
I had a £10k investment (Debenture) in a uk plc, which had trouble during covid and spent a long while in administration and has now (July 2025) completed its Final distribution and Administration conclusion.  I received a very small final consideration as part of the final settlement.  This was administered through Abundance Investments.

I'm in a position to sell some vanguard ETFs in a GIA, with the idea of off-setting my losses against the sale of ETF gains in full.  I could do this in one year, or over multiple years, but rather like the simplicity of doing it in one year.

Does this approach sound valid, or should I approach HMRC to check that this particular debenture's losses can  be offset ?

If anyone has any wrinkles about getting an answer out of HMRC, I would be grateful.  I'm in no particular hurry, but it feels like now is a good time while markets are high and to capture the loss in this tax year, before the details get forgotten.  I was considering writing an actual letter to HMRC, as this may take less time than waiting on the phone.  Thoughts ?

Thank you as always.

poseidon1

TJ666 said:

I'd just like to run this past the helpful people here.
I had a £10k investment (Debenture) in a uk plc, which had trouble during covid and spent a long while in administration and has now (July 2025) completed its Final distribution and Administration conclusion.  I received a very small final consideration as part of the final settlement.  This was administered through Abundance Investments.

I'm in a position to sell some vanguard ETFs in a GIA, with the idea of off-setting my losses against the sale of ETF gains in full.  I could do this in one year, or over multiple years, but rather like the simplicity of doing it in one year.

Does this approach sound valid, or should I approach HMRC to check that this particular debenture's losses can  be offset ?

If anyone has any wrinkles about getting an answer out of HMRC, I would be grateful.  I'm in no particular hurry, but it feels like now is a good time while markets are high and to capture the loss in this tax year, before the details get forgotten.  I was considering writing an actual letter to HMRC, as this may take less time than waiting on the phone.  Thoughts ?

Thank you as always.

Suggest you read the following guidance. 

https://www.gov.uk/government/publications/debts-and-capital-gains-tax-hs296-self-assessment-helpsheet/hs296-capital-gains-tax-and-debts-2022#loans-qualify

As long as the debenture does not constitute a security with qualifying corporate bond status ( such bonds cannot trigger allowable losses) then you are home and dry with a loss claim.

Whether HMRC will assist you in determining the status of your debenture for CGT purposes , you can only enquire - see below in the meantime -


https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg53702

wmb194

TJ666 said:

I'd just like to run this past the helpful people here.
I had a £10k investment (Debenture) in a uk plc, which had trouble during covid and spent a long while in administration and has now (July 2025) completed its Final distribution and Administration conclusion.  I received a very small final consideration as part of the final settlement.  This was administered through Abundance Investments.

I'm in a position to sell some vanguard ETFs in a GIA, with the idea of off-setting my losses against the sale of ETF gains in full.  I could do this in one year, or over multiple years, but rather like the simplicity of doing it in one year.

Does this approach sound valid, or should I approach HMRC to check that this particular debenture's losses can  be offset ?

If anyone has any wrinkles about getting an answer out of HMRC, I would be grateful.  I'm in no particular hurry, but it feels like now is a good time while markets are high and to capture the loss in this tax year, before the details get forgotten.  I was considering writing an actual letter to HMRC, as this may take less time than waiting on the phone.  Thoughts ?

Thank you as always.

Is this the full story? With these when they get into trouble there are often full or partial debt for equity swaps. 

If so, this would make it far easier to make the argument that it is not a "qualifying bond" - qualifying bonds are not supposed to be convertible - and at least some of the loss would be related to equity anyway.

TJ666

wmb194 said:

TJ666 said:

I'd just like to run this past the helpful people here.
I had a £10k investment (Debenture) in a uk plc, which had trouble during covid and spent a long while in administration and has now (July 2025) completed its Final distribution and Administration conclusion.  I received a very small final consideration as part of the final settlement.  This was administered through Abundance Investments.

I'm in a position to sell some vanguard ETFs in a GIA, with the idea of off-setting my losses against the sale of ETF gains in full.  I could do this in one year, or over multiple years, but rather like the simplicity of doing it in one year.

Does this approach sound valid, or should I approach HMRC to check that this particular debenture's losses can  be offset ?

If anyone has any wrinkles about getting an answer out of HMRC, I would be grateful.  I'm in no particular hurry, but it feels like now is a good time while markets are high and to capture the loss in this tax year, before the details get forgotten.  I was considering writing an actual letter to HMRC, as this may take less time than waiting on the phone.  Thoughts ?

Thank you as always.

"Is this the full story? With these when they get into trouble there are often full or partial debt for equity swaps. "

No equity was swapped for debt, at least for Abundance debenture holders, nor for anyone else as far as I can tell.

Here are some excerpts from the final company statement:

"You will find your share of the final payment within your Abundance account. As

there will be no further amounts received back on your investment in Monnow

Valley CHP, the investment will no longer appear in your Abundance account.

"The appointed Administrator conducts the process to recover any

value possible to return to the company’s stakeholders, including

Abundance investors. The business and assets of the company

are sold by the Administrator to an independent third party buyer

identified during a marketing process for £250k. The low value

achieved compared to the original investment amount can be

summarised by the distressed nature of the sale, sector-wide

challenges for biomass operators, unresolved technical problems

and Ofgem related uncertainties. After the deduction of

Administrator and professional fees there is only a minimal net

recovery to debenture holders.