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Edited version of your private ruling
Authorisation Number: 1012532668441
Ruling
Subject: Extension of time to acquire a replacement asset
Question
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?
Answer
Yes
This ruling applies for the following periods:
Year ending 30 June 2014
Year ending 30 June 2015
The scheme commenced on:
1 July 2013
Relevant facts and circumstances
You sold a CGT asset during the 2011-12 financial year and made a capital gain. The capital gain was deferred under the small business rollover.
You did not have any other CGT events in the 2011-12 financial year.
You have been actively investigating options to acquire a replacement asset and have entered into various negotiations which have failed prior to contract stage.
You continue to actively seek a suitable replacement asset.
You have requested an extension to the replacement asset period.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 104-190(2)
Reasons for decision
Where a taxpayer elects to take advantage of the small business rollover, there are rollover conditions that must be satisfied by the end of the replacement asset period. This period starts one year before and ends two years after the last CGT event that occurs in the income year for which you choose the rollover. However the Commissioner may extend the replacement asset period in certain circumstances (subsection 104-190(2) of the Income Tax Assessment Act 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 for a CGT event that occurred during the 2011-12 financial year. You have entered into negotiations to acquire several different replacement assets, however these negotiations have failed. You are currently in active dealings to find a suitable replacement asset. 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.