Private ruling: Capital losses
Date of advice: 17 October 2025
Published: 1 December 2025
Ruling period: Year ended DD MM YY
Date scheme commenced: DD MM YY

Ruling: Q1: Did you acquire a capital gains tax (CGT) asset under section 108-5 of the Income Tax Assessment Act 1997 (ITAA 1997) as a result of purchasing a purported investment bond? | A1: Yes. You acquired contractual rights from the date of the first payment you made on DD MM YY. | Q2: Did a CGT event (C2) subsequently happen to those contractual rights such that a capital gain or capital loss may be made? | A2: Yes. CGT event C2 occurs when your ownership of an intangible asset ends through cancellation, surrender or similar endings. Your ownership of the asset ended on DD MM YY when you realised that the investment bond did not exist and your money was lost. | Q3: Will the Commissioner allow a capital loss to be reported in your income tax return for the year ended DD MM YY? | A3: Yes. Any capital gain made in the same income year that the CGT event C2 occurred can be reduced by the capital loss and, to the extent there is an excess, either include the net capital gain in your assessable income or carry forward any net capital loss forward to offset against future capital gains.

Relevant facts and circumstances: In MM YY you and your spouse sold your house in Location A and made the decision to use the proceeds for investment purposes. You researched potential investment opportunities and found what appeared to be a legitimate bond opportunity connected to Company A, an ASX-listed Australian company. You were contacted by a person identifying themself as Person A, who presented as an adviser for the company. Over several phone calls and emails, Person A provided you with formal-looking documents and explained that you could purchase secure government-style bonds. You conducted checks with ASIC and the banks prior to transferring any funds who confirmed the name and accounts all matched. On DD MM YY, believing it to be authentic you signed up to invest $X in bonds. Your spouse made one transfer of $X and then on the next day a transfer of $X. The money was transferred from your account with Bank A to an account with Bank B. Following the first transfer your bank contacted your spouse to confirm they were the person making the transfer. When advised they had and why, they explained they would check with Bank B. They then called back confirming the Bank B account details were linked to the company and allowed the transfer to go through. You received a bond certificate, dated DD MM YY, confirming the investment. On DD MM YY your spouse was in hospital for medical treatment, and you attempted to contact the adviser to access money for medical expenses. The mobile number you had was disconnected and when you sent an email this bounced back to you. You found that the fraudulent website had been taken offline. On DD MM YY you and your spouse sought legal advice and were advised to go to the police. It had become clear that the bonds did not exist, and the investment was a scam. You and your spouse contacted the genuine company, Company A, and were advised they had no record of the investment and that fraudsters had been impersonating their name. On DD MM YY a report was made to State A Police. On DD MM YY a second report was made to State B Police. The lost money has not been recovered.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-25 | Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 section 110-55