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Edited version of private advice
Authorisation Number: 1051601993576
Date of advice: 7 November 2019
Ruling
Subject: Capital gains tax - replacement asset
Question
Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension to the replacement asset period to XX November 20XX?
Answer
Yes. After, reviewing the facts of your situation, the Commissioner will apply his discretion under subsection 104-190(2) of the ITAA 1997 and allow the extension of time.
This ruling applies for the following periods:
Year ending 30 June 2018
Year ending 30 June 2019
The scheme commences on:
1 July 2017
Relevant facts and circumstances
You sold management rights in October 20XX.
You elected to use the small business capital gains tax concessions, specifically the replacement asset rollover to defer the gain for a maximum of two years.
The replacement asset period ended in October 20XX.
From July 20XX, you began looking for a replacement asset and identified three management right businesses.
During the replacement asset period, you made reasonable enquiries of each business, however, for a variety of commercial reasons, you were unable to secure a contract to purchase during the replacement asset period.
On XX November 20XX, you signed a contract to purchase a management rights business owned and operated by yourself. The transaction settled shortly thereafter.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A
Income Tax Assessment Act 1997 subsection 104-185(1)
Income Tax Assessment Act 1997 subsection 104-190(2)