In its judgements of 12 January 2016 (IX R 48/14, IX R 49/14 and IX R 50/14), the Federal Fiscal Court (BFH) expressly opposed the legal opinion of the tax authorities with regard to the tax recognition of losses from the expiry of options. The judgements are of particular importance as they were issued on the current legal situation after the introduction of the flat-rate withholding tax. In this respect, the BFH also upholds the previous case law on the forfeiture of options under the old law (IX R 12/11, IX R 50/09).
In the cases in dispute, private investors had acquired share or index options after the introduction of the flat-rate withholding tax regime. As the price of the securities and share indices did not develop accordingly, these securities expired (automatically or due to lack of exercise) and were derecognised as worthless from the investors' securities accounts. The taxpayers claimed the loss in value as income-related expenses in their income from capital assets. According to the interpretation of the tax authorities, the expiry of securities is neither a sale in the strict sense nor one of the substitute offences of Section 20 (2) sentence 2 EStG, whereby such losses suffered are to be allocated to the private sphere of assets and thus outside the tax sphere.
In our opinion, the BFH correctly saw this differently and recognised the losses from the expiry of the worthless options for tax purposes. Accordingly, option-related losses are to be recognised when determining income from capital assets in accordance with Section 20 (2) sentence 1 no. 3 letter a of the Income Tax Act. This follows from the wording, the systematic position and the meaning and purpose of the provision. It is irrelevant whether the investor also acquires the underlying asset on the basis of the option or whether he settles the difference resulting from the option transaction in cash. The BFH regards the acquisition of the option and the outcome of the option transaction as a single unit.
Practical note:
According to the BFH, taxpayers will in future be able to offset losses from the expiry of options against other income from capital assets and utilise them for tax purposes.
But beware: these tax losses are not (yet) included in the banks' tax certificates. Investors must therefore claim these losses separately in their tax assessment.
