Private ruling: Capital loss - shares
Ruling period: Year ended 30 June 2009. | Year ended 30 June 2011.
Date scheme commenced: 1 July 1999.

Ruling: Q1: Can you amend your 2008-09 income tax return to include a capital loss as a result of the shares being declared worthless? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act Section 104-145

Reasons for decision: Detailed Reasoning - Capital gains tax event G3: Capital gains tax (CGT) event G3 happens when the liquidator makes a written declaration that he or she has reasonable grounds to believe that there is no likelihood that shareholders will receive any further distribution from the company. If this declaration is made, shareholders can choose to make a capital loss on their shares at the time the declaration is made. The capital loss arises in the income year in which the liquidator makes the declaration. A capital loss can only be offset against a capital gain. Where a capital loss cannot be offset against a capital gain in that income year, the capital loss is carried forward until such time that a capital gain is made and the capital loss can be used to offset that capital gain. In this case, the liquidators made a written declaration stating that no further distributions will be made to shareholders in 2011. The capital loss on the shares therefore arises in the 2010-11 income tax year. The Commissioner will not amend your 2008-09 income tax return as the capital loss on the shares arises in the 2010-11 income tax year when the written declaration by the liquidators was made. Please note: You will be entitled to include a capital loss on the shares in your 2010-11 income tax return.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | You were allotted additional shares. | In 2011, the liquidators made a written declaration stating that no further distributions will be made to shareholders.