Edited version of private advice

Authorisation Number: 1051753094308

Date of advice: 10 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 to 30 June 2021?

Answer

Yes.

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 30 June 2021 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 quick code 'QC52291' on ato.gov.au.

Additional information

This ruling has not considered your eligibility for the small business rollover. You should ensure that you satisfied the basic conditions and the other conditions relevant for the rollover. More information is available on our website ato.gov.au by searching QC 52266

This ruling applies for the following period

Year ending 30 June 2021

The scheme commenced on

1 July 2020

Relevant facts

You previously utilised the capital gains tax (CGT) small business rollover concession in the xxxx income year after disposing of your CGT asset.

You wish to rollover the capital gain of approximately $xxx.

You had the intention to purchase a new business within the two following years to reinvest your earnings and have been searching during this period.

You started considering your options soon after the disposal.

You were considering some CGT assets, but there have been very few on the market.

You approached several local business owners as well as explore some opportunities in city A. You have approached and discussed your interest in purchasing a business with several relevant people.

You have been regularly searching for business opportunities within city B.

You considered two assets that came on the market, however one was too large and the other was poorly run and had major issues.

You have approached xx owners of local businesses in total to date. One business is considering their position in relation to selling to you. However, at this stage you have made no offers as you have not found a suitable opportunity.

Unfortunately, no viable options have been presented to date.

With the current COVID crisis, you found it is the wrong time to be looking to purchase. Also with the uncertainty around the future ability of a business to perform, it was difficult to agree on a purchase price.

You wish to review further business opportunities as your replacement asset. You are hoping the economic climate may become more stable and more viable options may become available. You will continue to explore your options in city B and look for the right opportunity.

Given the unprecedented times and the uncertainty that lies ahead, you have found it is a dangerous time for businesses. You are less inclined to purchase a new business and take on substantial risk in the current economic state. When there is an outcome around COVID you will be in a position to make a final investment decision.

You have not used any of the roll over amount as yet.

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