Income Tax Assessment Act 1997
CGT event G3 happens if you own *shares in a company, or financial instruments issued by or created by or in relation to a company, and a liquidator or administrator of the company declares in writing that the liquidator or administrator has reasonable grounds to believe (as at the time of the declaration) that:
(a) for shares - there is no likelihood that shareholders in the company, or shareholders of the relevant class of shares, will receive any further distribution for their shares; or
(b) for financial instruments - the instruments, or a class of instruments that includes instruments of that kind, have no value or have only negligible value. 104-145(2)
The time of the event is when the declaration was made. 104-145(3)
Examples of financial instruments referred to in subsection (1) are:
(a) *debentures, bonds or promissory notes issued by the company; and
(b) loans to the company; and
(c) futures contracts, forward contracts or currency swap contracts relating to the company; and
(d) rights or options to acquire an asset referred to in a preceding paragraph of this subsection; and
(e) rights or options to acquire *shares in the company. 104-145(4)
You can choose to make a capital loss equal to the *reduced cost base of your *shares or financial instruments (as at the time of the declaration). 104-145(5)
If you make the choice, the *cost base and *reduced cost base of the *shares or financial instruments are reduced to nil just after the declaration was made.
This is for the purpose of working out if you make a capital gain or loss from any later CGT event in relation to the shares or financial instruments.Exceptions 104-145(6)
You cannot choose to make a *capital loss if:
(a) you *acquired the shares or financial instruments before 20 September 1985; or
(b) the shares or financial instruments were *revenue assets at the time when the declaration was made. 104-145(7)
You cannot choose to make a *capital loss for a *share, or a right to acquire a beneficial interest in a share, if:
(a) you acquired the beneficial interest (the ESS interest ) in the share or right under an *employee share scheme; and
(b) subsequent to an amount being included in your assessable income under Division 83A (about employee share schemes) in relation to the ESS interest, section 83A-310 (about forfeiture) applies in relation to ESS interest.
(Repealed by No 133 of 2009)
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