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DECLARATIONS (by an
administrator or liquidator)
SECTION 104-145
Liquidator or
administrator declares shares or financial instruments
worthless: CGT event G3
104-145(1)
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 (as at the
time of the declaration) that:
(a) for shares - there is no likelihood
that shareholders in the company, or shareholders of the
relevant class of shares, will receive any further
distribution for their shares; or
(b) for financial instruments - the
instruments, or a class of instruments that includes
instruments of that kind, have no value or have only
negligible value.
104-145(2)
The time of the event is when the
declaration was made.
104-145(3)
Examples of financial instruments
referred to in subsection (1) are:
(a) *debentures, bonds or promissory
notes issued by the company; and
(b) loans to the company; and
(c) futures contracts, forward
contracts or currency swap contracts relating to the company;
and
(d) rights or options to acquire an
asset referred to in a preceding paragraph of this subsection;
and
(e) rights or options to acquire
*shares in the company.
104-145(4)
You can choose to make a capital loss
equal to the *reduced cost base of your *shares or financial
instruments (as at the time of the declaration).
104-145(5)
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.
Note:
This is for the purpose of working out
if you make a capital gain or loss from any later CGT event in
relation to the shares or financial instruments.
Exceptions
104-145(6)
You cannot choose to make a *capital
loss if:
(a) you *acquired the shares or
financial instruments before 20 September 1985; or
(b) the shares or financial instruments
were *revenue assets at the time when the declaration was
made.
104-145(7)
You cannot choose to make a *capital
loss for a *qualifying share if:
(a) you did not make an election for
the *share under section 139E of the Income Tax Assessment Act
1936 for the income year in which you acquired (within the
meaning of Subdivision C of Division 13A of Part III of that
Act) the share; and
(b) the declaration was made no later
than 30 days after the *cessation time for the share.
104-145(8)
You cannot choose to make a *capital
loss for a financial instrument that is a right you acquired
(within the meaning of Subdivision C of Division 13A of Part
III of the Income Tax Assessment Act 1936), or would have so
acquired apart from section 139DD of that Act, under an
*employee share scheme.
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