Edited version of private advice

Authorisation Number: 1052204829350

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 June 20XX

The scheme commenced on:

I July 20XX

Relevant facts and circumstances

You were involved in a discussion with a person about an income producing opportunity.

You registered on a website and created an account on the platform.

You transferred various monetary amounts to the platform.

You subsequently tried to withdraw funds from your account but were unable to do so. You were then told to transfer additional amounts to your account with the platform.

You then realised you were the victim of a scam, and you reported the fraud to the relevant authorities.

You were subsequently contacted by someone purporting to be from an investment recovery agency.

You were told to transfer a monetary amount to another platform to assist with recovering your other funds.

After making a transfer, you realised you were the victim of another scam, and you reported the fraud 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