Can I claim a tax loss on suspended shares?

I complete my own tax returns, including those for capital gains/losses. I had a small number of shares in a company which went into administration: its shares are suspended and cannot be sold. How does Revenue treat such losses? Can I offset the loss against my capital gains or can I avail of the loss?

Ms AS, email

Shares that get themselves suspended are never good news for investors. First and foremost you cannot trade the stock – at any price. Second, the uncertainly engendered by suspension – particularly anything other than a very short-term measure where there may be a pre-pack arrangement – means there is a very high probability of the company failing entirely, leaving investors out of pocket.

However, as long as the shares are merely suspended, there is always a chance that the company will be able to trade again following completion of a scheme of arrangement with creditors. I wouldn’t say it is a strong chance but, to be fair, administrators cannot simply string a company administration along if they feel there is no possibility of a rescue. These things are overseen by the courts and the rules are fairly structured.

For that reason, Revenue will not automatically assume that suspended shares have no value. Unless, and until, Revenue rules that the shares are of negligible value or the company goes into liquidation, crystallising any loss, you will not be able to claim it against other gains on your tax return.

Being an administration rather than an examinership, I’m assuming the company is listed in the UK, or elsewhere, rather than Ireland where we use examinership for much the same purpose.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice