A director and major shareholder died in 2018 and his widow acquired all the shares in his private limited company. The deceased’s tax return does not show any capital gain. According to the widow, this implies a request for the loss to be carried forward. In 2020, she claims a loss of over €260,000. The tax inspector bases his calculation on the paid-up share capital and arrives at a loss of €5,000. The court ruled in favour of the tax inspector. Since 2015, the request has been included as a tick box on the tax return form, and the private limited company is not engaged in any business activities.
A loss of two tonnes
In her 2020 tax return, the widow declares a negative capital gain arising from a substantial interest of just over €260,000. She bases her calculation on a transfer price of nearly €13,000 and an acquisition price of over €270,000, comprising share premium and share capital. The tax inspector disagrees with this and sets the acquisition cost at the paid-up and issued share capital as at 1 January 2018 of over €18,000. The tax inspector thus arrives at a loss of €5,000.
A box since 2015
The carry-forward scheme requires a written request from all the interested parties. Such a request may also be made implicitly, as is clear from a 2006 judgment of the Supreme Court. The widow refers to a ruling in which the Court of Appeal accepted such an implied request. The court sees a crucial difference: that case concerned a tax return for 2011, when the tax return form did not yet include a box for carry-forward. That box has been in place since 2015, and in the 2018 tax return it was left blank. Anyone who is able and obliged to make the request but fails to do so does not meet the condition.