Shareholders in suspended, delisted and failed companies may feel somewhat peeved at what's happened to their shares. But these companies may yet give you a final return in the form of a tax benefit. The first step is to determine which category your company slots into.

Companies in administration The companies Advance Healthcare, Baraka Petroleum, Guilford Investments, Harvest Living, Intellect Holdings, Lafayette Mining, Mobilesoft and View Resources have gone into external administration this year. Administration never augurs well for shareholders. Rarely is there much residual value but at least investors can now dispose of their shares in these companies and crystallise their loss for tax purposes.

A number of companies are still in administration from previous years, including Pasminco, Henry Walker Eltin and Sons of Gwalia. If shareholders did not choose to make a capital loss in the income year a loss declaration was made for these companies, they may sell their shares this year to claim the loss (see loss declaration).

Suspended and delisted Many other companies are either suspended from quotation or delisted from the ASX. In some cases their securities have intrinsic value and should be retained. Many are inactive, virtually out of cash or have negative net tangible assets. Shareholders should consider disposing of these before June 30 to get the tax benefit.

If you are unsure of the status of your company and the tax implications, see http://www.delisted.com.au. You should also seek independent professional advice from your broker or accountant.

Disposal of securities Until 2004, shareholders in companies in administration were unable to claim their capital loss.

Since then they have been able to enter into an agreement to dispose of their worthless shares, triggering a capital gains tax event and crystallising the loss.

The disposal must be at arm's length or the Tax Office may invoke anti-avoidance provisions.

deListed provides such a service (the cost is $80 for the first parcel of shares and $55 for additional parcels).

Loss declarations One other CGT event of note occurs when an administrator or liquidator declares in writing he has reasonable grounds to believe there is no likelihood shareholders will receive any further distribution for their shares.

In the current financial year, loss declarations have been made for three companies: Stanilite Pacific, Chemeq and Coplex Resources. Shareholders in these companies can choose to make the capital loss in their 2007-08 tax return.

The Tax Office says: "You choose to make the capital loss in the income year the administrator or liquidator declares the shares worthless or the financial instruments to have no value or negligible value. You indicate that you have chosen to make the capital loss by the amounts you show at the CGT tax question on your tax return for that year."

If you don't choose to make the capital loss in that year, you won't make a capital loss until the share or financial instrument is disposed of.

Deregistered companies Deregistration, as distinct from delisting, of a company is the final act. The company is removed from the official records as a registered company and its shares have no value. Deregistration is also recognised as a CGT event and when it happens (which may be many years after a company fails), shareholders can crystallise a capital loss for tax purposes. About 800 previously listed companies qualify. See http://www .delisted.com.au/capitallosses0708.aspx.

Resuscitation Many companies that fail these days are subsequently sold as a shell and used by new managers as a vehicle for entry of another business to the ASX.

However, the residual value of a shareholding is often negligible even if the company is relisted.

Existing shareholders can be left with an unattractive parcel they must then try to sell to crystallise the capital loss.

Typically, getting rid of the shares early and taking the tax loss makes better economic sense.