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Edited version of private advice
Authorisation Number: 1051702164004
Date of advice: 30 June 2020
Ruling
Subject: Small business rollover concession on a capital gain
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/20XX?
Answer
Yes. The replacement asset period may be extended or modified by the Commissioner under subsections 104-197(5) and 104-190(2) of the ITAA 1997. Having regard to the particular circumstances of your case and the information provided, the Commissioner has applied the discretion and will extend the replacement asset period to XX/XX/20XX.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Entity A made a capital gain when an active asset was sold.
Entity A utilised the small business active asset and small business rollover concessions for the sale of the business property.
Entity A started to look for a replacement asset soon after the sale.
Entity A has entered into an agreement with a third party that will result in the acquisition of a replacement asset.
However, the acquisition is dependent on Council approval and construction of a commercial premises.
There have been delays in this process but entity A is expected to acquire the replacement asset by XX/XX/20XX.
The replacement asset will be used in a business carried on by either entity A, an affiliate of entity A, or an entity connected with entity A.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-E
Income Tax Assessment Act 1997 section 104-190
Income Tax Assessment Act 1997 section 104-197