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Edited version of private ruling

Authorisation Number: 1011582908862

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Ruling

Subject: Capital gains tax - capital loss - Commissioner's discretion

Does the Commissioner have any discretion to pay your carried forward capital losses to you?

No.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commences on:

1 July 2010

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You and your spouse owned an investment property.

You made a capital loss on the disposal of the property.

You want to purchase another property, but have been unable to obtain a bank loan.

You have requested the Commissioner to exercise his discretion to make a payment of the capital loss to you as you contend that you will not make a capital gain in the future against which you can offset the capital loss.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 102-10

Income Tax Assessment Act 1997 Section 102-15

Income Tax Assessment Act 1997 Section 102-20

Income Tax Assessment Act 1997 Section 102-22

Reasons for decision

Generally, you make a capital loss as a result of a capital gains tax (CGT) event if you received less capital proceeds for an asset than its reduced cost base. 

Capital losses can be applied to any capital gains that are made in the same income year. Any unapplied net capital losses can be carried forward and applied against any capital gains that have been made during the next income year, and so on, until they have been applied against future capital gains.

In your case, you made a capital loss when you disposed of your investment property. You have been unable to obtain a bank loan to purchase another dwelling and have requested the Commissioner to exercise his discretion to make a payment of the capital loss to you to assist in the purchasing of a dwelling. You contend that you will not make a capital gain in the future against which you can offset the capital loss.

While we acknowledge your circumstances there is no legislation which would enable the Commissioner to make a payment of the capital loss amount to you. Therefore, your capital loss can only offset against any future capital gain that you may make.

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