Private ruling: High yield investment scheme - capital loss
Date of advice: 15 January 2024
Published: 26 February 2024
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. This private ruling applies for the following periods: 1 July 20XX to 30 June 20XX The scheme commenced on: 1 July 2020

Relevant facts and circumstances: You invested in a trading platform. You were in contact with an investment manager that gained your trust and you felt comfortable making an initial and subsequent deposits to secure these investments. You believed you had a good understanding of finances and the platform and the investment manager appeared legitimate. Initially, you could see your investment rising, however over time you became suspicious of the authenticity of the platform and the investment manager. You were not able to withdraw your investments and you found out the investment was not genuine. You made reports to the various authorities.

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