Edited version of private advice

Authorisation Number: 1052375554820

Date of advice: 20 March 2025

Ruling

Subject: Investment loss - scam

Question 1

Did you acquire a CGT asset when you entered into a respective investment arrangement as defined in section 108-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

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

Question 2

Can you claim a capital loss on the investment scam?

Answer 2

Yes. You can claim a capital loss.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

XX XX 20XX

Relevant facts and circumstances

You were involved in a discussion with a person through a cross-platform messaging app who told you about an investment opportunity.

You participated in share trading through their suggested platform.

You made some gains through this platform as the scammers were gaining your trust.

These people offered you Institutional trading accounts through their institution.

You were supplied with a registration number that you verified.

You opened a trading account with their institution.

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

You have provided records for all transactions in your application.

Your trading account was blocked, and the institution threatened to report you.

You were told if you didn't pay XX amount you would lose your entire account balance.

You then tried to withdraw your funds from the institution. You were again asked to pay an institutional account channel withdrawal fee amounting to XXX, if you didn't pay this amount you would have to pay a large fine.

To comply with this request, you obtained loans to make the payment, upon making the payment you still could not withdraw your funds.

You have sold your Australian shares, obtained loans, and eventually had to sell your investment property to service the loans.

The institution was now asking for $XXX management and service fees.

This is when you realised it was a scam.

You have provided bank statements in your application.

You reported the matter to your local Police Station.

You were advised to report the scam to all the relevant authorities.

You have provided copies of these reports in your application.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 104-20(1)

Income Tax Assessment Act 1997 paragraph 104-20(2)(b)

Income Tax Assessment Act 1997 subsection 104-20(3)

Income Tax Assessment Act 1997 section 108-5