| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1051507860989
Date of advice: 23 April 2019
Ruling
Subject: Capital gains tax: worthless financial instruments
Question
Can you claim a capital loss for a loan made by you to a private company which went into liquidation under section 104-145 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes
This ruling applies for the following period:
Year ending 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You were a director of Company A.
Company A was placed into liquidation.
You had an unsecured director’s loan to Company A.
On DD MMM 20xx, the liquidator issued an interim report stating ‘we do not consider it likely that a dividend will be paid to unsecured creditors’.
On DD MMM 20xx, the liquidator issued a letter stating ‘there is no likelihood of paying a dividend to unsecured creditors’.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-145