Private ruling: Capital losses
Published: March 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Did you make a capital loss in the 2014-15 financial year? | A1: No, however a capital loss would have occurred in the relevant financial year.

Relevant facts and circumstances: You have an investment which was purchased after 1985. You hold the units as a capital investment. The entity is currently in liquidation. The liquidators made a written declaration in the relevant financial year that the investment has no value.

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

Reasons for decision: Summary: A capital loss or capital gain is made when a capital gains tax (CGT) event happens to a CGT asset. CGT event G3 occurs if a liquidator or administrator declares shares or financial instruments worthless. The time of the CGT event is when the declaration is made. In this case, the liquidators made a declaration in the relevant financial year that the investments had become worthless. Therefore, the capital loss would have occurred in the relevant financial year rather than the 2014-15 financial year.