Edited version of private advice

Authorisation Number: 1052165850466

Date of advice: 17 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 [description of the fraudulent arrangement]?

Answer

Yes. You acquired contractual rights from the outset of the arrangement.

Question 2

Did a CGT event subsequently happen to those contractual rights such that a capital gain or capital loss may be made?

Answer

Yes. CGT event C1 happened in respect of the contractual right when you discovered your loss and repudiated the contract.

This ruling applies for the following periods:

1 July 20XX to 30 June 20XX

The scheme commenced on:

1 July 2022

Relevant facts and circumstances

You were approached by an individual claiming to be a recruiter via WhatsApp.

The recruiter introduced you to an investment platform, where you had to complete a series of tasks involving investments.

Initially, after completing the tasks, you received your investment back along with promised commissions. This created a sense of trust and legitimacy. As you continued, the tasks required increasingly larger amounts to invest. When you were unable to continue paying, you requested a withdrawal of your initial investment, which was denied.

You have filed a report with the Australian Cyber Security Center and you hold a copy of it.

The scheme was presented to you as a legitimate investment opportunity, and there were no indications to you that it was not genuine. The individuals involved portrayed themselves as representatives of a legitimate investment platform.

Relevant legislative provisions

Section 102-5 Income Tax Assessment Act 1997

Section 104-20Income Tax Assessment Act 1997

Section 108-5 Income Tax Assessment Act 1997