| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1051583144851
Date of advice: 19 September 2019
Ruling
Subject: An extension of time
Question
Will the Commissioner exercise his discretion pursuant to subsection 124-75(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to 30 June 20XX to acquire a replacement asset?
Answer
Yes.
Having considered the company's circumstances and relevant factors the Commissioner considers it appropriate to grant an extension of the replacement asset period. Further information can be found be searching 'QC 17204' 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
The Company (AB) is an Australian company which owns non-residential land and property.
In 20XX, AB received notice from ABC advising that their interest in the landholdings was to be compulsorily acquired.
In 20XX, an acquisition notice was published in the Government Gazette to effect the compulsory acquisition of the landholdings.
In 20XX, AB lodged a Claim for Compensation for the amount of $XXX.
In 20XX, a Deed for Advance Payment was entered into by ABC and AB. ABC will pay Advance Money to AB as part compensation for the compulsory land acquisition.
In 20XX, the ABC wrote to AB and offered them $XX in compensation for the compulsorily acquired landholdings. The ABC also enclosed a compensation notice, a valuer determination, acquisition notice published in the Government Gazette, and a deed of release and indemnity.
AB is not satisfied with the offer and is currently in negotiations with ABC in order to reach an agreement for the price of the landholdings.
AB appealed to the Land and Environment Court and this court process remains unresolved.
AB also intends to purchase property to replace the compulsorily acquired landholdings and will be used in a similar manner to the previously owned property. As such, the replacement asset will be used for the same purpose as the original asset.
AB will only be able to acquire the replacement asset once the compensation negotiation concludes and it has clarity on the ultimate compensation amount it will receive.
Thus, AB has requested an extension of time until 20XX to enable them to locate and acquire an acceptable replacement asset.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 124-70
Income Tax Assessment Act 1997 Section 124-75
Income Tax Assessment Act 1997 Section 995-1