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Edited version of your written advice
Authorisation Number: 1012726763342
Ruling
Subject: Capital losses
Question
Are you entitled to declare a capital loss in relation to your shares?
Answer
No.
This ruling applies for the following period
Year ending 30 June 2015
The scheme commences on
1 July 2014
Relevant facts and circumstances
You purchased shares in a company.
You paid approximately $X for the shares.
Through a combination of takeovers, stock consolidation and very poor returns these shares are now worth approximately $Y.
You are unable to sell the shares unless you pay additional funds to either a broker or to set up an international brokerage account.
There has been no declaration made by liquidators or administrators that the shares are worthless.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Reasons for decision
Section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that capital gains tax (CGT) event A1 happens to a taxpayer on the disposal of a CGT asset where there is a change of ownership from the taxpayer to another entity. This change of ownership is taken to have occurred either upon entering a contract for the disposal of the asset, or if there is no contract, when the change of ownership occurs (subsection 104-10(3) of the ITAA 1997).
In this case you have not disposed of your shares and no CGT event has occurred. Therefore, you are not entitled to declare a capital loss in relation to the shares.
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