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Edited version of private advice
Authorisation Number: 1051825037108
Date of advice: 15 April 2021
Ruling
Subject: An extension of time to purchase a replacement asset
Question
Will the Commissioner exercise his discretion under section 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to DD MM YYYY?
Answer
Yes.Having considered the relevant facts, the Commissioner will apply his discretion under
subsection 104-190(2) of the ITAA 1997 and allow an extension of the time to DD MM YYYY for
the asset to purchase a replacement asset.
This ruling applies for the following periods:
Year ended DD MM YYYY
The scheme commences on:
DD MM YYYY
Relevant facts and circumstances
You sold Farm A, Water Access Licence #1, #2 and #3.
You made a capital gain and have elected to apply the Small Business Rollover Concession.
You attempted to purchase Farm B (a replacement asset) through private sale however was unsuccessful.
You attempted to purchase Farm C (a replacement asset) at a public auction and although you were the highest bidder you did not meet the reserve and negotiation was unsuccessful.
You experienced a severe drought which affected the conditions of Farm A, minimized the market for acquisition and the lending conditions of financial institutions, specifically the loan value ratio decreased from 65% to 45%.
COVID-19 imposed travel restrictions which prevented you from travelling and conducting your due diligence when purchasing a replacement asset.
You have resumed negotiations for Farm B (a replacement asset).
You have identified Farm C (a potential replacement asset) and will attend a public auction for Farm C on DD MM YYYY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-190
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