| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051319104167
Disclaimer
You cannot rely on this edited version in your tax affairs. You can only rely on the advice that we have given to you or to someone acting on your behalf.
The advice in the Register has been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict ATO policy or decisions.
Date of advice: 12 December 2017
Ruling
Subject: CGT – small business concessions – replacement asset period – extension of time
Question 1
Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to XX December 20XX?
Answer
Yes
This ruling applies for the following period:
Year ending 30 June 2018
Year ending 30 June 2019
The scheme commences on:
1 July 2017
Relevant facts and circumstances
In the 20XX-XX financial year you elected to use the small business rollover to defer capital gains that you made. The date of the capital gains tax (CGT) event was XX December 20XX.
You have considered a number of potential replacement assets within the replacement period, however the assets considered did not match your business needs.
You are currently completing due diligence on a potential replacement asset, however an acquisition has not been made within the replacement period.
You are continuing to look for a suitable replacement asset which is within your price range and matches your business needs.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 104-190(2)
Reasons for decision
In order to apply the small business rollover, a replacement asset must be acquired within two years after the relevant CGT event. However the Commissioner may extend the replacement asset period in certain circumstances (subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997)).
The relevant factors in determining whether to extend the replacement asset period are:
● there should be evidence of an acceptable explanation for the period of extension requested and that it would be fair and equitable in the circumstances to provide such an extension
● account must be had to any prejudice to the Commissioner which may result from the additional time being allowed, however the mere absence of prejudice is not enough to justify the granting of an extension
● account must be had of any unsettling of people, other than the Commissioner, or of established practices
● there must be a consideration of fairness to people in like positions and the wider public interest
● whether there is any mischief involved
● a consideration of the consequences.
You rolled over a capital gain under the small business rollover during the 20XX-XX financial year. You have been unable to acquire a suitable replacement asset within the replacement period. You have however, considered the purchase of a number of properties. We consider that you have made ongoing efforts to acquire a replacement asset.
Having considered the relevant factors above, and the particular circumstances of your case, the Commissioner has applied his discretion and will extend the asset replacement period to XX December 20XX.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
