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Edited version of private advice
Authorisation Number: 1052136766484
Date of advice: 15 January 2024
Ruling
Subject: High yield investment scheme - capital loss
Question 1
Did you acquire a CGT asset (as defined in section 108-5 of the Income Tax Assessment Act 1997 (ITAA 1997)) as a result of entering into a high yield investment scheme?
Answer
Yes. You acquired a CGT asset being a contractual right at the time of entering the arrangement.
Question 2
Did a CGT event subsequently happen to that contractual right?
Answer
Yes. CGT event C1 happened in respect of the contractual right when the contractual right came to an end. Section 104-20 of the ITAA 1997 outlines the rules for CGT event C1.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commenced on:
1 July 2020
Relevant facts and circumstances
In 20XX you were approached by someone under the guise of offering an investment opportunity. In your application, you have stated that you were convinced of the legitimacy of the venture and you made the investment. You transferred money from your bank account to various trading platforms.
There were several transactions made in 20XX. The total amount spent on these transactions was $X. Later that year, you found out the investment was not genuine and that you were unable to recover your money. You reported the other party to the Police.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 102-5
Income Tax Assessment Act 1997 section 104-20
Income Tax Assessment Act 1997 section 108-5