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Edited version of private advice
Authorisation Number: 1051902735714
Date of advice: 27 September 2021
Ruling
Subject: Capital gains tax
Question
Will the Commissioner allow you an extension to 30 June 2022 under section 124-75 of the Income Tax Assessment Act (ITAA 1997) to acquire a replacement property following the compulsory acquisition of your property at address, town, state, postcode?
Answer
Yes. The Commissioner agrees to extend the time to, as you meet the requirements of section 124-75 as well as Taxation Determination TD 2000/42 Income tax: capital gains: what is the scope of the words 'use the other asset... for the same purpose... or for a similar purpose' in subsection 124-75(4) of the Income Tax Assessment Act 1997in relation to a replacement asset?
This private ruling applies for the following period:
Year ended 30 June 2020
Year ending 30 June 2021
Year ending 30 June 2022
The scheme commences on:
1 July 2019
Relevant facts and circumstances
You are a resident of and reside in another country.
You each owned a % of an investment property (the property) as tenants in common with your spouse.
The property derived income which you have reported on Australian income tax returns.
The property was compulsory acquired by a Government Agency.
You received a total of $XXXX for the property.
You have been actively looking for a replacement asset from overseas.
You have engaged the services of a Property Representative as well as being registered and in regular contact with several real estate agents to assist with identifying a replacement property.
With the current Covid-19 pandemic and the associated travel restrictions you have not been able to enter Australia to view properties.
You arrived in Australia in September 20XX and have continued searching for a replacement property.
The property market conditions are currently very active resulting in several of the properties you have viewed being contracted for sale to other interested parties.
Due to the inflated prices and the limited availability of properties in Australia, you have unable to find a suitable replacement property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 124-75