Chilango Burrito Bonds

  • Restaurant chain Chilango raised money through mini-bonds this year**
  • It initially intended to raise just £1m but ended up with 3 times as much**
  • Mini-bonds are unregulated and unprotected high-risk investments**
  • According to reports the company has brought in a restructuring firm**
  • It said they would help to ‘assist on long-term planning, options and strategy’**
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Chilango shares were my first foray into crowdfunding. :frowning:

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So, will investors be getting a :burrito: or a :doughnut:?

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We will see soon I am sure

Hence my reluctance in investing in unsecured bonds.

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I invested in Chilango (equities) a while ago. Need to check my certificates if I can claim loss-relief. :frowning:

Meanwhile Chipotle (CMG) recovered after the e-coli bear market.

Email received today about the Chilango CVA - need to review the detail but I guess another where EIS loss relief may not be available - 7 out of 19 of my Crowdcube investments down the tubes!

Why would EIS loss relief not be available?

I understood this was only available if the company ceased trading completely, not restructured; however I need to do some further research on this.

Did any other Chilango investors manage to claim EIS loss relief?

Appears that the company was sold to RCDP Investments 4 Limited - whoever they may be. No record on Companies House.
The Administrators ‘Notice of administrator’s proposals’ was incorrect - the buyers name was RDCP Investments 4 Ltd who changed the name to Chilango Ltd on 09 Sep 2020

The last comms I received is from WCS Nominees back in August but nothing since then. I doubt there will be any residual value for equity holders?

Mucho Mas is still showing as in Liquidation -
22 Sept 2021 - Appointment of a voluntary liquidator

Any thoughts from other Chilango/Mucho Mas investors?

Also wondering when it would be appropriate to write off as tax loss? Any pointers appreciated

09 Nov 2022 - Liquidators statement if receipts ad payments to 02 Sept 2022 so still not dissolved yet.

10 November 2023 - another year on and still not dissolved

Still unsure as to when the loss ‘occurred’ :slight_smile:

  • CVA taking effect ?
  • Appointment of Administrator ?
  • Creditors Voluntary Liquidation ?
  • Appointment of Voluntary Liquidator?
  • Or Dissolution (which has not yet happened)?

From HS286 Negligible value claims and Income Tax losses on disposals of shares you have subscribed for in qualifying trading companies (2023) - GOV.UK

How and when to claim the relief

The relief has to be claimed within one year of 31 January following the year in which the loss occurred. An allowable loss made in 2022 to 2023 therefore has to be claimed on or before 31 January 2025 to set loss from the share disposal against income.

If you make an allowable loss in 2022 to 2023 you can claim the relief for 2022 to 2023 or 2021 to 2022 or both.

This table explains how to make a claim.

Tax year How to claim relief
2022 to 2023 You can claim the relief by making an entry in box 41 on page CG 2 of the SA108 Capital Gains Tax summary (2023) pages. You must also include the capital losses that are the subject of your claim in box 35 on page CG 2 and give details of the capital losses on page CG 3 in the ‘Any other information’ box, box 54 or in your computations.
2021 to 2022 You can claim the relief by making an entry in box 43 on page CG2 of the SA108 Capital Gains Tax summary (2023) pages. You must:

• include the capital losses that are the subject of your claim in box 35 on page CG 2

• give details of the capital losses on page CG3 in the ‘Any other information’ box, box 54 or in your computations

• calculate the difference between the actual liability for 2021 to 2022 and the liability that would have arisen if the relief you’re now claiming had been included in the 2021 to 2022 tax return

• enter the difference, that’s the decrease in tax due, in box 15 on page TC 2 of the SA110 Tax calculation summary (2022) pages|

If you claim Income Tax relief for a capital loss, you cannot also set the losses against capital gains.

If you made an allowable loss in 2021 to 2022, you have until 31 January 2024 to claim relief against your income of 2021 to 2022 or 2020 to 2021 by amending your 2021 to 2022 tax return.

When you make the claim, you must ensure that you include sufficient information about the claim within the tax return. As a minimum this must include:

  • the name of the company that issued the shares
  • the company registration number (or overseas equivalent) of the company that issued the shares
  • the country of incorporation of the company that issued the shares
  • the country of tax residency of the company that issued the shares (if different to the country of incorporation)
  • the date when the allowable loss arose
  • if the relief is being claimed for multiple tax years, a statement of the tax year for which the deduction is to be made first

How the relief is giv