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Edited version of private advice
Authorisation Number: 1051629525756
Date of advice: 23 January 2020
Ruling
Subject: Small business relief - replacement asset - 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?
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 Quick Code 'QC 52291' on ato.gov.au.
This ruling applies for the following periods:
Income year ending 30 June 2020
Income year ending 30 June 2021
Income year ending 30 June 2022
The scheme commences on:
1 July 2019
Relevant facts and circumstances
The Trust owned and carried on a business
The Trustees of the trust entered into a contract to sell the business on the DD/MM/ YYYY.
In the contract it states:-
· The Principal must provide assistance until XXXX
· Neither the Principal nor an associate, can directly or indirectly conduct, carry on, engage or have an interest in a business similar or competitive with the sold business for 3 years for the XXkm radius outside of the City.
You satisfy the basic conditions in Subdivision 152-A of the Income Tax Assessment Act 1997.
You have been actively looking for a replacement asset.
You would prefer an established business preferably in the industry where you have previously worked.
As you have had minimal luck to date in finding a suitable business, you have broadened the scope and are still actively looking at an array of businesses across a range of industries.
The restraints under the contract of the business sale have contributed to the delay as the specified distance limits businesses available.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-190
Income Tax Assessment Act 1997 Subsection 104-197(2)
Income Tax Assessment Act 1997 Subdivision 152-E