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Edited version of private advice
Authorisation Number: 1051731941331
Date of advice: 3 August 2020
Ruling
Subject: Extension of time
Question
Will the Commissioner exercise the discretion to extend the replacement asset period to the specified date?
Answer
Yes. Having regard to your full circumstances, the Commissioner considers it would be fair and equitable to extend the replacement asset period to the specified date. Further information on the compulsory acquisition rollover can be found on by searching 'QC 17204' on ato.gov.au.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You purchased an asset.
You received a Notice of Intention to acquire for the compulsory acquisition of land.
The asset was compulsorily acquired.
You received a Notice of Acquisition which included the offer of compensation amount inclusive of the estimated market value of the asset.
You disputed the amount of compensation.
The court determined mediation date is after the end of the normal replacement asset period.
Whilst some compensation has been received with respect to the amount, the outstanding amount will not be decided until the dispute has been settled.
You have always intended to acquire a replacement asset(s) to fully offset the notional gain made on the compulsory acquisition.
Since the compulsory acquisition, you have successfully acquired a property which satisfies the replacement asset requirements. However, the cost of this replacement asset does not absorb the full amount of the notional gain made on the compulsory acquisition.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 124-B
Income Tax Assessment Act 1997 Paragraph 124-75(3)(b)