Private ruling: Investment scheme - capital loss
Date of advice: 15 January 2024
Published: 26 February 2024
Ruling period: Year ended 30 July 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 the investment scheme? | A1: Yes. You acquired a CGT asset being a contractual right at the time of entering into the arrangement. | Q2: Did CGT event C1 subsequently happen to your contractual right so that you made a capital loss? | A2: 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.

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