Share losses could be tax deductible

INDIVIDUALS who have lost out on the stock market could write-off their losses against next year’s tax bill if MPs pass an amendment.

Those concerned are individuals who have lost less than €25,000 during the first 11 months of 2008. The amendment would allow them to take the losses off their tax assessable income in 2009 (not for 2008) – up to a limit of €10,700.

Any benefits would not be seen until tax demands arrive in 2010 for the 2009 tax year.

The Senate’s financial commission has put forward the amendment to be included in next year’s budget. If agreed by parliament the measure would allow individuals to deduct losses on the stock market from their taxable revenue.

Senator Philippe Marini, spokesman for the Senate’s financial commission said the amendment had been drawn up in consultation with the Finance Ministry and other ministers, however new Economic Recovery Minister Patrick Devedjian gave a lukewarm response to the idea in a radio interview.

Devedjian said it would be up to MPs to decide if the measure would actually help the economy in general or simply be a windfall to certain people.

“This is an exceptional measure to help individuals who have had no other choice but to sell their shares in 2008,” said Marini.

According to a recent study by economic analyst group Bipe said the total wealth of the French was going to drop over the next two years as a result of stock and housing market losses.

The group said the loss would range between €550 billion and €10 trillion over two years.

The CAC 40 (the index of the top 40 performing French-based companies) has dropped by 47% since the start of the year.