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Edited version of your private ruling
Authorisation Number: 1012454221413
Ruling
Subject: CGT - Small business concessions, extension of time for rollover relief
Question
Will the Commissioner exercise his discretion under subsection 124-75(3) of the Income Tax Assessment Act 1997 to allow further time for you to acquire a replacement asset?
Answer
Yes, until 30 June 2014
This ruling applies for the following period
Year ended 30 June 2013
Year ended 30 June 2014
The scheme commenced on
1 July 2011
Relevant facts
You owned property.
The State Department resumed the property in the relevant year.
No agreement or contract was entered into at the time of resumption, and no compensation was paid at that time.
There has been a protracted legal dispute over the compensation payable.
You received some compensation in the subsequent year. The final settlement sum is still the subject of the continuing legal dispute.
Currently the rollover provisions expire in the subsequent year.
Relevant legislative provisions
Income Tax Assessment Act 1997 subdivision 124-B
Income Tax Assessment Act 1997 section 124-75
Income Tax Assessment Act 1997 subsection 124-75(1)
Income Tax Assessment Act 1997 subsection 124-75(2)
Income Tax Assessment Act 1997 paragraph 124-75(3)(b)
Reasons for decision
Subdivision 124-B of the Income Tax Assessment Act 1997 (ITAA 1997) explains the circumstances when a rollover is available for an asset that is compulsorily acquired, lost or destroyed.
If you receive money as a result of the compulsory acquisition, you can only choose a rollover if you incur expenditure in acquiring another CGT asset. Under subsection 124-75(3), you must incur at least some of the expenditure no earlier than one year before the event happens or, within one year after the end of the income year in which the event happens.
This period may be extended in special circumstances as outlined in the following example in Taxation Determination TD 2000/40:
Graeme had a commercial property compulsorily acquired by a State authority. Graeme is having a protracted legal dispute with the authority over the quantum of the compensation. On these facts, we would accept that there are special circumstances to allow further time.
Having regards to your circumstances and the above principle, the Commissioner will allow an extension of time until 30 June 2014.