After you have sold the shares, or at the latest after the administrator’s final settlement, they are capital losses. Merely delisting is not enough, as was observed with Talvivaara, when the company lingered for years as unlisted ‘Ahtium’ and refused to go bankrupt, so losses could not be deducted either.
I have investments in unlisted companies. Can I deduct the invested amount from my capital income if an unlisted company goes bankrupt? Do I then need to obtain some certificate of bankruptcy? The acquisition cost is stated in the shareholders’ agreement.
Tax Lawyer Miika Härkönen replies:
A final loss in value of a security due to bankruptcy can be deducted as a capital loss. There must be reliable proof of the acquisition cost.
A capital loss arises in the tax year in which the loss in value is final. This happens when the bankruptcy estate administrator announces that no distribution share will accrue, or when the final settlement of the bankruptcy estate is made.
If a limited company’s bankruptcy lapses due to insufficient assets, the value of the shares is considered definitively lost when the company is removed from the trade register.
The capital loss is deductible from capital income in the tax year and for the five subsequent years.
The tax lawyer’s answer was published in Taloustaito2 on 3.5.2022.