Suspension of stock trading does not imply an automatic capital loss

The situation of a company that suspends its stock market trading raises questions regarding the tax treatment of the shares held by individual shareholders. Recently, the Dirección General de Tributos (DGT) has issued a ruling that precisely delimits the moment when a decrease in the value of these holdings may be considered a capital loss for the purposes of Personal Income Tax (IRPF).

What the DGT has ruled

The query presented focused on determining whether the mere suspension of a company's trading automatically generated a capital loss for the shareholder. The body has ruled that the suspension of trading does not, in itself, imply the existence of a computable capital loss.

For a loss to be recognized as established in Article 37.1, e) of the LIRPF, it is essential that one of the following events occurs:

• Dissolution and liquidation: The company must undergo a process of dissolution and subsequent liquidation.
• Transfer of shares: The sale of the holdings to a third party, where the loss is determined by the difference between the transfer value and the acquisition value.

In both cases, the resulting amount will be integrated into the savings tax base.

What this means for you

If you are a shareholder in an entity that has ceased trading, you cannot declare a capital loss in your tax return based solely on the impossibility of trading those shares on the market. The book value or acquisition value of your shares remains intact for the Tax Administration as long as the company continues to exist and no transfer or liquidation occurs.

What should be done

It is fundamental to analyze the legal situation of the company in which you hold an interest. Determining a capital loss requires proof of the entity's liquidation or the formalization of a sale. It is recommended to assess each particular situation to understand the impact of the corporate structure on your savings tax base and to ensure that the calculation of gains or losses is carried out at the legally appropriate time.