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Edited version of private advice
Authorisation Number: 1051548587407
Date of advice: 18 July 2019
Ruling
Subject: The small business rollover and an extension of time
Question
Will the Commissioner use his discretion to extend the replacement asset period pursuant to subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) in respect of the Small Business capital gains tax (CGT) replacement asset roll-over relief to 30 June 20XX?
Answer
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 ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You had a capital gains tax (CGT) event on X May 20XX.
The CGT event resulted in a capital gain of $X which was rolled over under the small business rollover.
You purchased a property.
The property was purchased on XX February 20XX for $X.
You are operating a business on this property.
In addition to the property purchased, you have also purchased plant and equipment that is leased to and used in the business of a connected entity.
You are now requesting an additional extension of time to XXJune 20XX as there was an uncrystallised capital gain balance of $X at 30 June 20XX.
The balance of uncrystallised capital gains at XX April 20XX was $X.
During the 20XX-XXfinancial year you purchased assets that are being used in the connected entity's business. These assets will also be used to partially reduce the rollover amount.
You are also considering the purchase of another parcel of land locally which would be used in a business. You have previously had discussions about the purchase of the property with the owner. The purchase of the property is likely to occur in the 20XX-XX financial year. The purchase price for the property is expected to be $X.
Relevant legislative provisions
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 and
Income Tax Assessment Act 1997 subdivision 152-A.