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Edited version of private advice
Authorisation Number: 1051913963837
Date of advice: 25 October 2021
Ruling
Subject: CGT - replacement asset roll-over relief
Question
Will the Commissioner, pursuant to subsection 104-190(2) of the Income Taxation Assessment Act (ITAA 1997), grant an extension of time until X XXber 20XX to apply the small business capital gains tax (CGT) replacement asset roll-over relief?
Answer
Yes.
Having considered the circumstances and the relevant factors the Commissioner considers it appropriate to grant an extension of the replacement asset period. Injury to one of your principals and COVID restrictions have limited your ability to find a suitable replacement business and you have provided evidence of enquiries you've made and the advanced stage the potential acquisition of a business reached before the vendor withdrew prior to settlement.
Further information can be found by searching Quick Code 'QC 52291' on ato.gov.au
This ruling applies for the following period:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
X XXber 20XX
Relevant facts and circumstances
The Company A Pty Ltd as trustee for Trust A (you) owned and carried on a business XX (the business).
On X XXber 20XX the business entered into a contract to sell.
You elected to choose the small business roll-over concession.
You satisfy the basic conditions in Subdivision 152-10 of the Income Tax Assessment Act 1997.
You have been actively looking for a replacement asset.
You would prefer an established business, preferably in the accommodation / hospitality industry.
The two-year replacement asset period was due to expire on DDMMYY but an extension until DDMMYY was granted.
Between MMYY and MMYY, you enquired on X different businesses for sale.
You attempted to purchase a business however the vendor decided not to sell prior to settlement date.
You had taken significant steps to acquire this business including obtained financial approval on a business loan and re-appointed existing bookkeeper.
You completed a business plan and cash flow forecast and initiated draft lease and sale agreements associated with the purchase.
The effects of COVID-19 restrictions have also limited the opportunities for you to secure a new business.
In early XXX 20XX,one of your principals, Person A suffered an injury, requiring hospitalisation and surgery.
Person A has ongoing appointments and scans in relation to the injury.
Relevant legislative provisions
Income Taxation Assessment Act 1997 Section 104-190(2)
Income Taxation Assessment Act 1997 Subsection 104-197(2)
Income Taxation Assessment Act 1997 Subdivision 152-A
Income Taxation Assessment Act 1997 Subdivision 152-E
Income Taxation Assessment Act 1997 Subdivision 152-10