Private ruling: High yield investment scheme - capital loss
Date of advice: 15 January 2024
Published: 26 February 2024
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 2020

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 came to an end. Section 104-20 of the ITAA 1997 outlines the rules for CGT event C1.

Relevant facts and circumstances: In 20XX you were approached by someone under the guise of offering an investment opportunity. In your application, you have stated that you were convinced of the legitimacy of the venture and you made the investment. You transferred money from your bank account to various trading platforms. There were several transactions made in 20XX. The total amount spent on these transactions was $X. Later that year, you found out the investment was not genuine and that you were unable to recover your money. You reported the other party to the Police.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-5 | Income Tax Assessment Act 1997 section 104-20 | Income Tax Assessment Act 1997 section 108-5