Loan or was it shares?

Question

I paid money into a company which was intended to be share capital. Indeed I have a letter from an accountant in respect of this. However shares were never issued and when the company went bankrupt the money was on the books as a debt or should I say loan. I assume there is a time lag between the advance of money and the issuing of shares. However in this case it was around 8 months between putting the money in and the company going down.

Deadlines are looming for a claim and what are the thoughts here - of getting tax relief on the loss of share capital through negligible share relief.

Any thoughts here would be appreciated.

Peter Saxton · Accepted Answer

What evidence do you have? Have you got any documentation from the company?

Fred · Answer

Thanks for your reply.

The only documentation is a letter from the accountant which clearly states that the money is for a number of shares and also who is putting this money in. All the minutes of any board meetings are stored with the liquidators and not readily accessible. Hope this helps.

Peter Saxton · Answer

If you have no documentation from the company I think you will have to rely on the liquidators.

Fred · Answer

What documentation would I require?  Just that I felt a credible  accountant's letter would have been an independent source of intent/reason  for writing out a cheque to the company.

Peter Saxton · Answer

Minutes that mention a share issue. You may be able to argue the case but it can take a long time to get answers out of HMR&C.

Fred · Answer

Many thanks - I'll do some digging.

Loan or was it shares?

Join the Discussion

Didn't find your answer?