Edited version of private advice

Authorisation Number: 1052204209436

Date of advice: 15 January 2024

Ruling

Subject: 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 the investment scheme?

Answer

Yes. You acquired a CGT asset being a contractual right at the time of entering into the arrangement.

Question 2

Did CGT event C1 subsequently happen to your contractual right so that you made a capital loss?

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:

Year ended 30 July 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were involved in a discussion with a person online who told you about an investment opportunity.

You were instructed to create an account with a supposed investment platform.

You transferred various amounts from your personal bank account to the platform.

Sometime later you decided to withdraw the funds from your account on the platform; however, you were asked to pay a 'tax' on the supposed profits.

After you transferred another amount to the platform, you researched it online and realised it was a scam.

You reported the scam to the relevant authorities.

Relevant legislative provisions

Income Tax Assessment Act section 104-20

Income Tax Assessment Act section 108-5

Income Tax Assessment Act section 110-25

Income Tax Assessment Act section 116-20