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Edited version of private advice
Authorisation Number: 1051685032392
Date of advice: 25 May 2020
Ruling
Subject: Small business concessions - compulsory acquisition
Question
Will the Commissioner exercise the discretion available under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to provide an extension of time for you to elect to use the replacement asset roll-over until 30 June XXXX due to the Property being compulsorily acquired?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will exercise the discretion to grant an extension of time to make a choice to utilise the roll-over under subdivision 124-B of the ITAA 1997. Further information on making a choice can be found by searching 'QC18383' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commences on:
1 July 2018
Question
Will the Commissioner exercise the discretion available under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to provide an extension of time for you to elect to use the replacement asset roll-over until 30 June XXXX due to the Property being compulsorily acquired?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will exercise the discretion to grant an extension of time to make a choice to utilise the roll-over under subdivision 124-B of the ITAA 1997. Further information on making a choice can be found by searching 'QC18383' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You and another entity acquired a building (the Property).
The Property had a strong long term tenancy profile.
The other entity received a Proposed acquisition notice (PAN) for the Property, notifying that the land (and thus the building) will be compulsorily acquired by a government department.
On XXXX you and the other entity signed a contract for sale of the Property to a government department.
Settlement occurred on the XXXX.
Your share of proceeds was $AA,AAA,AAA.
A year later you purchased the first replacement asset with part of the proceeds.
Since then you have inspected a number of assets to find a suitable replacement asset.
You would like an extension of time to acquire a replacement asset.
You have found it difficult to purchase similar assets.
The uncertainty COVID-19 has further reduced the supply of properties.
Relevant legislative provisions
Income Tax Assessment Act 1997 Paragraph 103-25(1)(b)
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 124-70
Income Tax Assessment Act 1997 Section 124-75