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Edited version of private advice
Authorisation Number: 1051722206461
Date of advice: 17 July 2020
Ruling
Subject: Capital gains tax - replacement asset extension of time
Question
Will the Commissioner exercise his discretion pursuant to subsection 124-75(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow up until 30 June 2021, for the you to incur expenditure in acquiring a replacement CGT asset?
Answer
Yes, having considered the circumstances and relevant factors, the Commissioner considers it appropriate to grant an extension of the replacement asset period. Further information can be found be searching 'QC 17204' on ato.gov.au.
This ruling applies for the following periods:
Year ending 30 June 2021
The scheme commences on:
1 July 2020
Relevant facts and circumstances
You are the registered owners of land.
The property was purchased as joint tenants and has been your main residence as well as a share farm.
The total land size is XXXX square metres.
On XXXX issued a notice of compulsory acquisition of some of land.
A formal letter of offer was issued where compensation was offered.
A period of negotiation followed where it was discovered that the original notice of acquisition was incorrect as a second title was present and not considered.
Addressing the additional title presented lengthy delays.
You received some of the compensation in XXXX.
The final compensation amount has yet to be received due to a current dispute over where the boundary fence should be placed.
You are yet to sign the final deed of settlement.
Since the end of XXXX you have been searching for a replacement asset.
You have provided the significant information on offers made on suitable replacement assets.
You have not been able to find replacement land within the 12 months from the compulsory acquisition.
You intend that the replacement property will be used for a similar purpose as the original land
satisfying the requirements of subsection 124-75(5) of the ITAA 1997.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 124-70
Income Tax Assessment Act 1997 Section 124-75