Q&A:Q In January 2009, Anglo Irish Bank was nationalised.The Government, at the time, announced that an independent assessor would be appointed to put a value on the Anglo shares. To date, no assessor has been appointed – nor is there any indication when this will take place and a value be put on the shares. (As a shareholder, I am of the opinion that these shares are valueless).

I would appreciate your opinion on whether and when one would be in a position to claim a loss for Capital Gains purposes and therefore able to set the loss off against current or future capital gains. In addition, should such a loss be included in the Return of Income in the year the loss is incurred, even though it may not be claimed until some years later?

Mr T.B., Dublin

A As you can imagine, this is an area of significant interest to a large number of people, following the collapse of the bank earlier this year.

It certainly says something for the Government’s priorities that while it has devoted extensive time to finding some formula to bail out the banks, it has yet to appoint an assessor, promised by Minister for Finance Brian Lenihan at the time of the collapse, to determine the residual value of the shares, if any, at the time the bank was nationalised.

I checked this week with the Department of Finance and it confirmed that no assessor has yet been appointed. They could say only that the appointment was going through the process – although that process seems to be considerably more streamlined when it comes to setting up the administration behind the proposed National Asset Management Agency (Nama).

The department was also unable to give any clarity as to how long the assessment process would take once an assessor is put in place. All told, it is a bit of a shambles.

In a question last week about the possibility of offsetting Anglo losses against gains on other share disposals, I suggested that the Revenue was likely to take a pragmatic approach to the Anglo losses, even in the absence on an assessor’s report. Following that response, a number of people have called to say that they have been told by the Revenue that the position is that no loss can be claimed on Anglo Irish shares until that loss is crystallised.

I have spoken to Revenue and the official position is as follows. When the shares are transferred to the Minister (as they were last January/February), “a claim to negligible value will be accepted” – ie, the Revenue will accept that the shares are worthless.

The statement goes on to confirm that the loss is “crystallised” when the shares are transferred to the Minister.

All this means that holders of Anglo Irish shares at the point when the bank was nationalised are fully entitled to claim their full loss on the value of the investment in Anglo Irish Bank in the current year.

People are used to having to clarify their capital gains tax position on transactions in the first three-quarters of the year for settlement by the end of October. However, the Minister has changed the rules in order to maximise tax revenue in the current year as he struggles to minimise the exchequer deficit.

In 2009, the breakdown of the year for the purposes of capital gains tax now sees net gains over the first 11 months of the year – ie to end-November – paid by December 15th. Gains made in December must be settled with the Revenue by the end of January 2010. This pattern will be the same for future years.

So what happens if and when an assessor is eventually appointed and determines that there actually was some residual value in the nationalised Anglo Irish shares, and that shareholders should receive some payment for those shares from the State? The Revenue says that in the event of such a payment, it will be offset against the losses already claimed.

If those losses have already been fully offset against other capital gains, any gain determined by the assessor will be chargeable in full for the purposes of capital gains tax.

Deemed disposal dates of PLC shares

Q Thanks for your clarification on the deemed disposal date of Anglo Irish Shares.

What is the deemed disposal date for those holding shares in public limited companies (PLCs) that go into receivership – eg, Newcourt. Is it a) when a receiver is appointed, b) after distributions are made to unsecured creditors, or c) another date?

Mr J.H., e-mail

A Revenue points to Section 538 of the Taxes Consolidation Act 1997. It lays down that a disposal of an asset at “negligible value” occurs where a person claims that asset has been lost, destroyed or rendered worthless “and the facts support the claim”.

Essentially, you need to show that the loss is likely to be permanent. The Revenue specifically refers to situations where a company goes into receivership or liquidation – where there is little or no prospect of recovery in the value of your investment – and states that, in such circumstances, the rule applies.

That seems to indicate to me that – in a situation like Newcourt – the relevant date is the one on which the appointment of a receiver is made. There is no need to wait until distributions are made.

A receiver will, of course, look to break up and sell off the firm to repay creditors, and shareholders would be among that group. However, shareholders are unsecured creditors in such a situation and are at the back of the queue when it comes to benefiting from any proceeds unlocked by a receivership process.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street,

Dublin 2 or by e-mail to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.