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Edited version of private advice
Authorisation Number: 1051630208704
Date of advice: 4 January 2020
Ruling
Subject: Replacement Asset Period
Question
Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to XX/XX/XXXX?
Answer
Yes. Having considered the relevant factors, and the particular circumstances of your case, the Commissioner has applied his discretion and will extend the asset replacement period.
This ruling applies for the following period:
Financial year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You sold your business on XX/XX/XXXX. As part of the sale, you disposed of your interests in property, resulting in a capital gain.
You were eligible to apply the 50% capital gains discount along with the small business active asset reduction to the sale of the property. You then decided to apply the small business rollover in subdivision 152-E of the Income Tax Assessment Act 1997 to the capital gain with the intention of purchasing a replacement asset.
You entered into an agreement to purchase a new business prior to the expiration of the two year period to obtain a replacement asset, subject to due diligence and finance approval.
Delays were incurred satisfying the finance conditions. The Vendors decided not to proceed, and consequently, you were unable to acquire the business.
You are now looking for another replacement business asset however various difficulties have been encountered due to the limited opportunities in your area, which is geographically remote. To date, nothing suitable has presented.
You anticipate being able to purchase a replacement asset by XX/XX/XXXX.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 104-190(2)
Income Tax Assessment Act 1997 Subdivision 152-E