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ATO Interpretative Decision

ATO ID 2003/193 (Withdrawn)

Income Tax

Capital loss on withdrawal from a superannuation fund
FOI status: may be released
  • This ATO ID is withdrawn because it is a restatement of the law and does not contain an interpretative decision.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Can the taxpayer offset a loss incurred on the withdrawal of their investment in a superannuation fund against capital gains?

Decision

No. The taxpayer cannot offset a loss incurred on the withdrawal of their investment in a superannuation fund against capital gains.

Facts

The taxpayer purchased a right to receive an allocated pension from a superannuation fund.

The taxpayer withdraws from this fund. The amount paid out is less than the amount the taxpayer originally invested.

Reasons for Decision

Section 118-305 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a capital gain or capital loss is disregarded if it is made from a CGT event happening in relation to a right to an allowance, annuity or capital amount payable out of a superannuation fund or approved deposit fund.

Therefore, the capital loss resulting from the CGT event happening to the right to the allocated pension payments on withdrawal from the superannuation fund is disregarded.

This means that only the eligible termination payment provisions apply.

Date of decision:  1 November 2001

Year of income:  Year ending 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
   section 118-305

Related Public Rulings (including Determinations)
Taxation Ruling IT 2157

Related ATO Interpretative Decisions
ATO ID 2003/194

Keywords
Capital gains
Capital gains tax
Capital losses
CGT assets
CGT events
CGT exemptions
CGT exempt component
Eligible termination payments
Superannuation, retirement & employment termination
Allocated annuities & pensions
Superannuation pensions
Superannuation

Business Line:  Business & Personal Taxes Centre of Expertise

Date of publication:  4 April 2003

ISSN: 1445-2782

history
  Date: Version:
  1 November 2001 Original statement
You are here 5 March 2010 Archived

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