Capital loss on shares requires the dissolution and liquidation of the company
The situation of shares in a company that stops trading on an official secondary market has raised doubts regarding the possibility of declaring a capital loss in Personal Income Tax (IRPF). The Dirección General de Tributos (DGT) has issued a binding ruling to define the exact moment when this change in assets occurs.
What the DGT has resolved
The query sought to determine whether a company's delisting would allow for the reflection of a capital loss in IRPF. The agency has resolved that mere delisting does not automatically imply a capital loss for the shareholders.
In order to compute a loss as established in Article 37.1, e) of the Law 35/2006 (LIRPF), it is essential that the dissolution and subsequent liquidation of the company take place. The ruling establishes that the applicable tax period will be the one in which the liquidation is formalized, the moment at which a change in assets is considered to exist. The resulting amount will be integrated into the savings tax base.
What this means for you
If you are an individual shareholder of an entity that stops trading on the stock exchange, you cannot declare the drop in the value of your shares as a capital loss in your tax return based solely on the lack of liquidity or the absence of trading. The value of your holdings remains intact for tax purposes until the company formally ceases to exist.
This ruling directly affects individuals wishing to reduce their savings tax base by declaring losses in situations where companies in which they participate face trading crises.
What you should do
It is necessary to distinguish between the loss of market value and the fiscal capital loss. In a delisting situation, the legal status of the company must be verified. The loss will only be tax-deductible when the dissolution and liquidation process is completed in accordance with the Capital Companies Law. It is recommended to assess each particular situation to determine the appropriate time to declare the loss.
Frequently asked questions
- Can I declare a loss if the company stops trading on the stock exchange?
- No, the lack of trading is not sufficient to compute a capital loss in IRPF.
- When can the loss on shares be declared?
- Only when the effective dissolution and liquidation of the company occurs.