Edited version of private advice

Authorisation Number: 1051752737493

Date of advice: 9 September 2020

Ruling

Subject: Capital gains tax

Question

Will the Commissioner exercise the discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period?

Answer

Yes.

The small business rollover allows you to defer the capital gain made from a capital gains tax (CGT) event if you acquire one or more replacement assets and satisfy certain conditions. The basic conditions which must be met to obtain relief are set out in Subdivision 152-A of the ITAA 1997.

For you to obtain a rollover, subsection 104-185(1) of the ITAA 1997 requires you to acquire a replacement asset within a period starting one year before and ending two years after the date of disposal of the asset for which you are claiming the rollover. Subsection 104-190(2) of the ITAA 1997 states that the Commissioner may extend those time periods.

Having regard to your full circumstances, the Commissioner considers it would be fair and equitable for the purposes of section 104-190(2) of the ITAA 1997 to extend the replacement asset period to the specified date and allow the small business roll-over under Subdivision 152-E of the ITAA 1997. Further information on the small business rollover can be found on by searching 'QC52291' on ato.gov.au.

This ruling applies for the following period

Year ending 30 June 20XX

The scheme commenced on

1 July 20XX

Relevant facts

You acquired a replacement asset on xxxx.

The property came onto the market unexpectedly. You had to act on buying the property when it came up for sale.

The purchase price of the property was $xxx.

You then made attempts to sell another property within 12 months but were unable to.

Firstly, you verbally advised the lessee, neighbours and family members the property would be sold as soon as you received confirmation of offer on the property.

You received two formal offers. The Agents were engaged in xxxx and initial appraisal issued in xxxx.

The initial attempt in selling the property failed.

The other offer was subject to boundary issues being rectified and replacement of fencing which took time. Around xxxx you commenced discussions on a new boundary with the neighbour. The property was to be surveyed and some refencing was required to rectify the problem before the sale. The property was surveyed in xxxx and the refencing was done in xxxx.

Drought conditions set in which impacted on you being able to sell.

You sold the property on xxxx. The property was sold for $xxx.

You wish to roll over $xxx.

You satisfy the basic conditions in Subdivision 152-A of the ITAA 1997.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 152-E

Income Tax Assessment Act 1997 section 103-25

Income Tax Assessment Act 1997 section 104-185

Income Tax Assessment Act 1997 section 104-190