Delisting of shares from the stock exchange does not automatically generate a capital loss

The Directorate General of Taxes (DGT) has issued a relevant ruling for shareholders of companies that cease to be listed on official secondary markets. There is a question as to whether the loss of value or the inability to trade shares following their delisting can be accounted for as a capital loss in the IRPF tax return.

What the DGT has ruled

The DGT has determined that the exclusion of securities from the registry of book-entry securities does not, in itself, entail the transfer of the securities nor the loss of ownership of them. In this sense, the fact that a share stops trading does not imply that the shareholder has ceased to be the owner of their stake in the share capital.

For a capital loss to occur pursuant to Article 37.1, e) of the IRPF Law, delisting from the stock exchange is not enough. It is mandatory that the dissolution and liquidation of the company be carried out beforehand. Only at the moment the liquidation occurs can the existence of a loss be determined and, consequently, the tax period will be that in which said process is formalized.

What this means for you

If you are an individual shareholder holding shares in a company that has stopped trading, you cannot reflect that decrease in value as a capital loss in your income tax return based solely on the delisting from the market. Your ownership of the shares remains intact as long as the company continues to exist and its liquidation process has not been completed.

What should be done

In this situation, it is necessary to evaluate the legal and financial status of the company in which you are a shareholder. If the objective is to recognize a capital loss to reduce the IRPF taxable base, the dissolution and liquidation process of the entity must be considered in accordance with current regulations. Each situation requires a technical analysis of the company's structure and the facts motivating the delisting.