Edited version of private advice

Authorisation Number: 1051930128165

Date of advice: 6 December 2021

Ruling

Subject: Replacement asset period - extension of time

Question

Will the Commissioner exercise the discretion under section 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to XX/XX/20XX?

Answer

Yes. Having considered the relevant facts, the Commissioner will apply the discretion under subsection 104-190(2) of the ITAA 1997 and allow an extension of the time to XX/XX/20XX to acquire a replacement asset.

This ruling applies for the following periods:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You sold your business. As part of the sale, you disposed of your interests in the property. You made a capital gain.

You were eligible to apply the 50% capital gains discount along with the small business active asset reduction to the sale of the property. You then decided to apply the small business rollover under subdivision 152-E of the Income Tax Assessment Act 1997 to the capital gain with the intention of purchasing a replacement asset.

You entered into an agreement to purchase a business.

Delays were incurred satisfying the finance conditions, particularly satisfying the bank's separate due diligence and valuation requirements. The Vendors decided, after the offer lapsed on time, that they would instead accept a cash offer from another buyer to purchase the business. Consequently, you were unable to acquire the business.

You have since been looking for another replacement business asset. Due diligence has been performed on a number of other businesses however you have encountered difficulties due to limited opportunities in XXXX, which is a geographically remote region. To date, you have not been able to acquire a replacement asset.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-190