Private ruling: High yield investment scheme - capital loss
Date of advice: 6 March 2024
Published: 15 April 2024
Ruling period: Year ending 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: 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? | A1: Yes. You acquired a CGT asset being a contractual right at the time of entering the arrangement. | Q2: Did a CGT event subsequently happen to that contractual right? | A2: Yes. CGT event C1 happened in respect of the contractual right when the contractual right ended. Section 104-20 of the ITAA 1997 outlines the rules for CGT event C1.

Relevant facts and circumstances: In September 20xx you engaged an overseas based broker, to purchase investments. Between September and December 20xx you paid $xxx,xxx to the firm for purported investments. In March of the following year the broker advised you that your investments had all been lost. Upon further investigation you realised that you had never received any genuine investments.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-20 | Income Tax Assessment Act 1997 section 108-5