Private ruling: Capital gains tax: worthless financial instruments
Date of advice: 23 April 2019
Published: June 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Can you claim a capital loss for a loan made by you to a private company which went into liquidation under section 104-145 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: You were a director of Company A. Company A was placed into liquidation. You had an unsecured director’s loan to Company A. On DD MMM 20xx, the liquidator issued an interim report stating ‘we do not consider it likely that a dividend will be paid to unsecured creditors’. On DD MMM 20xx, the liquidator issued a letter stating ‘there is no likelihood of paying a dividend to unsecured creditors’.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-145