Claiming Capital Gains Loss on Private Investment with Fraudulent Activity

Can the following be claimed as a capital loss? A private investment in a scheme that was designed to pay regular income, but subsequently it appears funds may have been misappropriated, there is likely fraud and majority/if not all of the assets and hence investment are unrecoverable. The investment was running for 2+ years. It was not previously declared (except for an initial $404) as there was an option to immediately reinvest the income so it wasn't previously declared as no gain was crystallised. Other investors had received regular pay-outs previously so at least to start with the scheme was legitimate. I understand this would likely fall under the negligible value remit and only once it has been determined that recoverability is impossible. The individual running the scheme has already been made bankrupt and trustees appointed to recover as many funds, if any, as possible.

Hi Harry,
You state that no income from the investment has previously been declared as it was mmediately re-invested.
Depending on the type of investment, the distribution may be taxable when payable even if re-invested.
Please see the guidance starting from:
SAIM5000 - Dividends and other company distributions: overview and contents
Thank you.             
 

Thanks for you reply. I understand the tax implications of the payouts themselves. My query was related to claiming the initial investment as a capital loss due to the investment being irrecoverable?

Hi,
Please refer to guidance at
HS286 Negligible value claims and Income Tax losses on disposals of shares you have subscribed for in qualifying trading companies (2024)
to see if you meet the conditions to qualify.
Thank you.