| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012607460928
Ruling
Subject: Capital Gains Tax
Question and Answer
Does the Commissioner of Taxation have the discretion to apply a capital loss against income which is not capital in nature?
No
This ruling applies for the following period
Financial year ended 30 June 2014
The scheme commences on
1 July 2013
Relevant facts and circumstances
You bought a property after 1985. You sold the property, incurring a capital loss in this financial year.
You advise that you will not be investing in any property in the future.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-10
Reasons for decision
You make a capital gain or loss as a result of a capital gains tax (CGT) event happening to a CGT asset. CGT assets include real estate acquired on or after 20 September 1985.
You make a capital gain if your capital proceeds from the sale of a CGT asset are greater than the cost base for the purchase of that asset. You make a capital loss if your reduced cost base for the purchase of that asset is greater than the capital proceeds.
You made a capital loss upon disposal of your property.
Capital losses that are incurred in an income year can be offset against capital gains derived in the same year. Alternatively, capital losses may be carried forward as net capital losses without a time limit and offset against capital gains realised in subsequent years.
A current year net capital loss is not deductible in its own right and cannot be offset against revenue gains in calculating taxable income: section 102-10(2) of the ITAA 1997
There is no provision in the legislation which gives the Commissioner of Taxation discretion to offset a capital loss against other sources of income so he is unable to allow you to offset your capital loss against your income. To this end, your capital loss will be carried forward until it can be applied against future capital gains.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
