Selling shares that have completely lost value at effectively no cost - any reason not to?

rob oyle

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Working this through in my head, would appreciate any views.

I currently hold 6 shares in AIB, from before the time of the massive share consolation a few years back. This means each share has an effective historic cost price of (gulp!) €2,016 each. Given AIB shares are trading at around €1, this is a lost investment.
Separately, my online account at Davy Select costs €50 a quarter, but allows transaction fees to be set against this, meaning the first €50 of transaction fees is effectively written off against account maintenance fees.
I was thinking of one or two transactions each quarter for the upcoming quarters, to sell a AIB single share each time, netting a cost of c. €14 per transaction (the minimum transaction fee is €15) and booking a capital loss of €2,000. I don't see any reason to continue to hold these shares.
Is there an advantage to not realising capital losses that are clear and obvious? I am already carrying about €5,000 in losses from previous share sales in previous years. The actual 6 shares are held by me in physical certificate form, but the sales would be of other shares acquired more recently and held via Davy (note: no length of share holding issues to consider).

In reality, I understand this to be a 'paper loss' v 'realised loss' consideration, rather than a 'free transaction'. In that regard, when is one or the other of these losses better to have than the other?

Pros:
-Effectively zero cost.
-There's no reason to hold on to this small number of shares for capital appreciation.

Cons:
-In theory, I won't be able to use the annual €1,270 allowance, even after the current carried forward losses are utilised.
 
Context: I would have had 21 chargeable transactions across 2017-2019 (some before the Davy cost structure changed to allow offsetting of costs), so a fairly regular user of my account, but do not foresee any other transactions (buying or selling) in 2020.
 
Apologies if I'm missing something but are we talking about shares worth 6 euro .

Just get rid and be done. Close your expensive Davy account.
Why pay that much when you could use DeGiro or some other brokerage that has almost zero fees?
 
I've been looking into this myself for some UK bank shares I have where I want to crystallise the loss to offset some gains I have this year. My limited understanding is that you don't even have to sell them. You should be able to make a negligible value claim - the shares are effectively worthlessness to you because it'd cost more to trade them than they're worth.
I've a but more research to do on my situation, but it might be worth looking into for you.
 
This was my experience with Revenue on this issue a few years ago:

I was allowed to offset my total losses on Anglo Irish Bank shares I’d held as they were effectively cancelled by the government so the loss was technically crystallised at that time .

I was not allowed do similar with Allied Irish Bank shares. Like the OP I had a fair few but the consolidation means I now own 5 of them. Revenue said I had to go ahead and sell them and thereby crystallise the loss before I could offset them against CGT.

Luckily I had a gain of a few thousand (long story) three years ago and I was able to use a bit of the Anglo share loss to offset the CGT on that. I actually got a refund from Revenue of CGT paid which was sweet. I’m not going to go to the cost of selling my 5 AIB shares as they are paper shares and I’d have to use a broker, rack up expenses etc.. I’m holding on in the hope they become the next Amazon or Apple !!
 
Apologies if I'm missing something but are we talking about shares worth 6 euro .

Just get rid and be done. Close your expensive Davy account.
Why pay that much when you could use DeGiro or some other brokerage that has almost zero fees?
The purpose of the thread is more a discussion around the realisation of the loss, rather than the proceeds of the sale itself. There's a total paper loss of €12k on those six shares and I don't know if there would be a reason to hold on to them.
 
This was my experience with Revenue on this issue a few years ago:

I was allowed to offset my total losses on Anglo Irish Bank shares I’d held as they were effectively cancelled by the government so the loss was technically crystallised at that time .

I was not allowed do similar with Allied Irish Bank shares. Like the OP I had a fair few but the consolidation means I now own 5 of them. Revenue said I had to go ahead and sell them and thereby crystallise the loss before I could offset them against CGT.

Luckily I had a gain of a few thousand (long story) three years ago and I was able to use a bit of the Anglo share loss to offset the CGT on that. I actually got a refund from Revenue of CGT paid which was sweet. I’m not going to go to the cost of selling my 5 AIB shares as they are paper shares and I’d have to use a broker, rack up expenses etc.. I’m holding on in the hope they become the next Amazon or Apple !!
That makes sense, since the Anglo shares are no longer in your possession, whereas the AIB shares can still be traded. Assuming you don't even get the AIB shares sold though, you'll never be able to set those losses against a capital gain elsewhere. In a scenario where CGT is due at a future point, the cost/hassle of selling the shares then might all be worth it.
 
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