Taxation Laws Amendment (Venture Capital) Act 2002 (136 of 2002)

Schedule 1   Capital gains and capital losses, and related matters

Income Tax Assessment Act 1997

3   After section 26-65

Insert:

26-68 Loss from disposal of eligible venture capital investments

Partners in VCLPs

(1) You cannot deduct under this Act your share of a loss made from the disposal or other realisation of an *eligible venture capital investment if:

(a) it is made by a *VCLP that is *unconditionally registered; and

(b) were that disposal or other realisation to be a *disposal of a *CGT asset, your share of any *capital gain or *capital loss would be disregarded under section 118-405.

Partners in AFOFs

(2) You cannot deduct under this Act your share of a loss made from the disposal or other realisation of an *eligible venture capital investment if:

(a) it is made by:

(i) an *AFOF that is *unconditionally registered; or

(ii) a *VCLP that is unconditionally registered and in which an AFOF that is *unconditionally registered is a partner; and

(b) were that disposal or other realisation to be a *disposal of a *CGT asset, your share of any *capital gain or *capital loss would be disregarded under section 118-410.

Eligible venture capital investors

(3) You cannot deduct under this Act a loss made from the disposal or other realisation of an *eligible venture capital investment if:

(a) you are an *eligible venture capital investor; and

(b) were that disposal or other realisation to be a *disposal of a *CGT asset, any *capital gain or *capital loss would be disregarded under section 118-415.