Not every old share certificate is a winning lottery ticket. Sadly, companies go bust. If you hold a certificate for Woolworths, Carillion, or Thomas Cook, the paper is likely worthless.
However, distinguishing between a “Bust” company and a “Renamed” company is critical.
The “Dissolved” Check Before you spend money on phone calls or indemnity fees, perform a basic health check on the company.
- Search Companies House: Go to the UK Government Companies House website.
- Check the Status:
- “Active”: Good news. The company exists.
- “Liquidation” / “In Administration”: Bad news. Shareholders are at the back of the queue (behind banks and employees). You usually get nothing.
- “Dissolved”: The company is dead. The shares are worthless.
The Exception: “Negligible Value Claims” If you hold shares in a company that went bust, you have lost your money – but you can claim a tax break.
- You can file a “Negligible Value Claim” with HMRC.
- This allows you to treat the shares as “sold for £0,” creating a Capital Loss that you can offset against other Capital Gains Tax (CGT) bills.
- Tip: Keep the “worthless” certificate as evidence for HMRC.
Don’t Assume it’s Bust Many people assume “British Steel” went bust. It didn’t – it evolved into Corus, which was bought by Tata. That “worthless” British Steel paper actually had value for a long time. Always use Divica to verify if a company really died or just changed its name.