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Edited version of private advice
Authorisation Number: 1051895895258
Date of advice: 4 September 2021
Ruling
Subject: CGT - small business rollover concession
Question
Will the Commissioner exercise discretion under section 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to DD MM YYYY?
Answer
Yes. Having considered the relevant facts, the Commissioner will apply discretion under section 104-190(2) of the ITAA 1997 and allow an extension of the time to DD MM YYYY to purchase a replacement asset.
This ruling applies for the following periods:
Year ended DD MM YYYY
The scheme commences on:
DD MM YYYY
Relevant facts and circumstances
You sold an active asset (Business 1).
You applied the small business rollover concession in Subdivision 152-E of the ITAA 1997 to the capital gain.
Within the two-year period, you identified a replacement asset to acquire (Business 2). You and an unrelated third party equally obtained ownership in Business 2 (50:50). Business 2 is operated through a unit trust and you were unable to invest further in Business 2 until you obtained 100% ownership of the unit trust.
You applied for a loan which would provide you the funding to buyout the third party.
Due to COVID-19 there was a delay in having your loan application processed (operational constraints).
You were formally approved for the loan.
The acquisition of the unrelated party's units were delayed due to an internal dispute being navigated by the unrelated party.
You purchased the ownership interest of the third party in Business 2 (replacement asset).
Relevant legislative provisions
Income Tax Assessment Act 1997- section 104-190(2)