Income Tax Assessment Act 1997



Division 104 - CGT events  

Subdivision 104-G - Shares  

SECTION 104-145   Liquidator or administrator declares shares or financial instruments worthless: CGT event G3  

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.

The time of the event is when the declaration was made.

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.

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).

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.


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.


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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