Issue
Can the taxpayer offset a loss incurred on the withdrawal of their investment in a superannuation fund against capital gains?
Decision
No. The taxpayer cannot offset a loss incurred on the withdrawal of their investment in a superannuation fund against capital gains.
Facts
The taxpayer purchased a right to receive an allocated pension from a superannuation fund.
The taxpayer withdraws from this fund. The amount paid out is less than the amount the taxpayer originally invested.
Reasons for Decision
Section 118-305 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a capital gain or capital loss is disregarded if it is made from a CGT event happening in relation to a right to an allowance, annuity or capital amount payable out of a superannuation fund or approved deposit fund.
Therefore, the capital loss resulting from the CGT event happening to the right to the allocated pension payments on withdrawal from the superannuation fund is disregarded.
This means that only the eligible termination payment provisions apply.