Loan claim – Tax consultant – Hagen – Holzwickede – Kamen – Lünen

Default on a private loan receivable as a loss from capital assets. The principle applies that changes in the value of assets held as private assets are not taken into account for tax purposes. Even if the assets were used to generate income. An exception applies only to capital gains if acquisition and disposal take place within certain periods (for example, 10 years in the case of land).

Since the introduction of the final withholding tax, however, gains from the sale of capital assets (e.g. shares) have also been recognized for tax purposes, irrespective of time limits. Losses from the sale can be offset against surpluses from capital assets. However, in the case of losses from the disposal of shares, offsetting against gains from the disposal of shares is only possible.

In this context, it was questionable whether the complete loss of a receivable, for example after (private) insolvency of the debtor, can also be treated as a loss on disposal. This has now been positively decided by the Federal Fiscal Court.

The loss of a receivable cannot be offset against profits from other types of income. But with surpluses from capital assets. If these surpluses are not sufficient for offsetting in the year in which the receivable defaults, the remaining loss due to the default can be carried forward for offsetting in subsequent years.

(Further comments & information on this can be found in our information letter under the point 4.)