Private ruling: CGT - losses
Date of advice: 17 November 2025
Published: 5 January 2026
Ruling period: Year ended XX X 20XX
Date scheme commenced: XX X 20XX

Ruling: Q1: Can you apportion the capital loss incurred from a loan arrangement with X Pty Ltd on a 50/50 basis as the funds invested were drawn from your joint offset bank account? | A1: Yes Unless there is evidence to the contrary, it is presumed that joint account holders beneficially own the money in equal shares. You both contributed 50% each of the funds used to create the debt owed to you by X Pty Ltd. You are joint owners of the debt and have a 50% interest each. As you are equitable owners of 50% of the funds contributed to acquire the asset you are each entitled to 50% of the capital loss each.

Relevant facts and circumstances: Person 1 and Person 2 were dealing with you as professional people. Person 1 and Person 2 were directors of X Pty Ltd. You entered into a loan agreement with X Pty Ltd. The funds lent were transferred from your joint offset account. Only one of you signed the loan agreement. You provided a copy of the loan agreement with X Pty Ltd. The amount of the loan to X Pty Ltd was for $XXX,XX. The funds lent were transferred from your joint xx offset account. You provided copies of the transfers from your joint xx offset account to X Pty Ltd. The loan was to be repaid by XX X 20XX. You were notified X Pty Ltd entered voluntary administration. Voluntary administrators were appointed. You lodged a Formal Proof of Debt or Claim (Form 535) with the administrators. Liquidators were appointed at a meeting of creditors. You received written notice from the liquidators that it appears unlikely a dividend will be distributed to creditors. You provided a copy of the letter from the liquidators. All your financial assets and bank accounts are jointly owned. You provided evidence and statements to verify this. The loan amount of $XXX,XXX was credited to your joint account. You transferred $ XXX,XXX of the loan account to your Joint Offset account for your investment property to keep the money in both offset accounts. You transferred $XXX, XXX from your Joint Offset account for your investment property back to your joint offset xx account to enable the transfer to X Pty Ltd.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 100-20(1) | Income Tax Assessment Act 1997 section 104-145 | Income Tax Assessment Act 1997 Subsection 108-5(1) Further issues for you to consider | We have limited our private ruling to the questions raised in your application. There may be related issues that you should consider, including: | Individuals and sole traders can request an amendment to their tax return if you: | • have made a mistake | • forgot to include something | • had a change in circumstance after lodging | Individuals generally have 2 years to amend an assessment. The time limit starts from the day after your notice of assessment is sent to you.

Reasons for decision: Summary: A loan provided to the company is a CGT asset within the meaning of the terms in Section 108-5(1) of the Income Tax Assessment Act 1997 (ITAA 1997). A CGT asset is: (a) any kind of property; or (b) a legal or equitable right that is not property. A debt owed to a lender is a CGT asset. Subsection 100-20(1) of the ITAA 1997 states you can make a capital gain or loss only if a capital gains tax (CGT) event happens. Relevant for the purpose of this ruling is CGT event G3. Subsection 104-145(1) of the ITAA 1997 provides that CGT event G3 happens if you own shares in a company, or financial instruments issued by or created by or in relation to a company, and a liquidator or administrator of the company declares in writing that the liquidator or administrator has reasonable grounds to believe at the time of the declaration that: • there is no likelihood that shareholders in the company, or shareholders in the relevant class of shares, will receive any further distribution for their shares; or • the instruments, or class of instruments that includes instruments of that kind, have no value or have only negligible value. Subsection 104-145(2) of the ITAA 1997 provides that the time of the event is when the declaration was made. Subsection 104-145(3) provides examples of financial instruments referred to in subsection 104-145(1). They include loans to the company. Subsection 104-145(4) of the ITAA 1997 provides that you can choose to make a capital loss equal to the reduced cost base of your shares or financial instruments at the time of the declaration. Subsection 104-145(5) of the ITAA 1997 provides that if you make the choice, the cost base and reduced cost base of the shares or financial instruments are reduced to nil just after the declaration was made . Taxation Determination TD 92/102 Income tax: capital gains: in what format should a declaration by a liquidator under section 160WA be made? Paragraph 3 states that a written declaration that addresses these matters is acceptable to the ATO. As outlined in Taxation Determination TD 2017/11 Income tax: who should be assessed to interest on bank accounts? paragraph 4 joint account holders beneficially own the money in the accounts : Unless there is evidence to the contrary, it is presumed that joint account holders beneficially own the money in equal shares. Relevant evidence can include information regarding who contributed to the account, in what proportions contributions were made, the nature of the contributions, who drew on the account and who used the money (and accrued interest) as their own property. Evidence may also be provided that joint account holders hold money in the account on trust for other persons. | Detailed Reasoning - Application to your circumstances: You entered into a contract with X Pty Ltd to provide a loan. The funds provided for the loan were transferred from your joint offset account. You have received written advice from the Y Pty Limited (liquidators) stating it appears unlikely a dividend will be distributed to creditors at this stage. This has enabled you to choose to make a capital loss at the time of the liquidator's 'declaration. A beneficial owner is the person or entity who is beneficially entitled to the income and proceeds from an asset. Joint account holders beneficially own the money in equal shares. You have an equal share in the account which included the funds loaned to X Pty Ltd. You can apportion the capital loss incurred from the loan arrangement on a 50/50 basis as the funds invested were drawn from your joint offset bank account and as joint account holders you have a beneficial interest in any asset acquired with funds from the joint account.