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Edited version of your written advice
Authorisation Number: 1051459305326
Date of advice: 03 December 2018
Ruling
Subject: Capital gains tax (CGT) and the small business concessions
Question
Will the Commissioner extend the replacement asset period?
Yes.
Having considered your circumstances and the relevant factors the Commissioner considers it appropriate to grant an extension of the replacement asset period. Further information can be found by searching 'QC 52291' on ato.gov.au
This ruling applies for the following periods:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You entered into a contract to sell shares. The contract contained terms for an Earn Out Arrangement (the Arrangement) to be entered into by the parties.
The Arrangement was for payments to be made in less than 5 financial years if certain conditions were met.
You applied the small business rollover contained in Subdivision 152-E of the Income Tax Assessment Act 1997 to disregard the remaining net capital gain made on the sale of the shares, after applying the general 50% discount and the small business active asset reduction.
You received payments according to the Arrangement in several financial years.
In 20XX you received a notice outlining the performance of the business.
You will not receive a further payment under the Earn Out arrangement and you will not receive a Final Earn Out Amount.
The latest possible time that a payment could have been received under the Arrangement was 20XX.
You had an expectation, based on prior years’ performance that further payments under the Arrangement would be made.
Relevant legislative provisions
Income Tax Assessment Act 1997 subdivision 152-E
Income Tax Assessment Act 1997 section 104-190