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Edited version of your written advice
Authorisation Number: 1051410680042
Ruling
Subject: Capital gains tax – small business concession – extension of time
This ruling applies to the beneficiaries of the trust and to the trustee and to any future trustees, for as long as the ruling remains current.
Question
Will the Commissioner exercise his discretion to extend the replacement asset period in respect of the small business capital gains tax (CGT) replacement asset roll-over relief?
Answer
Yes
Having considered the relevant factors, and the particular circumstances of your case, the Commissioner will exercise his discretion to extend the replacement asset period.
This ruling applies for the following period
Financial year ending 30 June 20XX
The scheme commences on:
11 September 20XX
Relevant facts and circumstances
You signed a contract for the sale of your business.
You elected to utilise the replacement asset rollover for the balance of the capital gain.
The sale was a forced sale by the franchisor due to a legal matter.
Due to the uncertainty around the outcome of the legal proceedings, in the period of time following the business sale until the legal matter was concluded you were unable to commence the process of acquiring a replacement asset which left a limited time to find a replacement prior to the expiry of the two year period.
Despite the genuine efforts at acquiring a suitable replacement asset, the two year period expired without a replacement being found.
You later signed a contract for the purchase of a business, which was settled a short time after the end of the replacement asset period.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A
Income Tax Assessment Act 1997 Subdivision 152-E
Income Tax Assessment Act 1997 Subsection 104-185(1)
Income Tax Assessment Act 1997 Subsection 104-190(2)
Income Tax Assessment Act 1997 Section 104-197
Income Tax Assessment Act 1997 Section 104-198
Further issues for you to consider
This ruling has not considered your eligibility for the small business rollover concession. You should ensure that you satisfy the basic conditions and the other conditions relevant for the concession. More information can be found at Capital gains tax concessions for small business, which is available on our website www.ato.gov.au.