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Edited version of private advice
Authorisation Number: 1051947458752
Date of advice: 7 February 2022
Ruling
Subject: CGT rollover
Question
Will the Commissioner exercise his discretion under paragraph 124-75(3)(b) of Income Tax Assessment Act 1997 (ITAA 1997) to extend the time period beyond the one year under special circumstances to use funds to rebuild the destroyed asset?
Answer
Yes. The Commissioner will exercise his discretion under paragraph 124-75(3)(b) of the ITAA 1997 to allow the taxpayer until 30 June 20XX to replace the destroyed asset.
This ruling applies for the following period:
30 June 20XX
30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
In Month 20XX you purchased a property (the Property).
The Property has been an investment property and tenanted since Month 20XX.
In Month 20XX the decision was made to retire to the Property and the long-term tenants were given X days' notice to vacate.
In Month 20XX the Property was vacated and rental contract with the real estate agency contract terminated.
In Month 20XX the Property was repurposed to a holiday home pending your retirement to a council area.
Later in Month 20XX the Property was destroyed by a bushfire which was part of the bushfires.
In Month 20XX road access was made safe to allow access to the Property.
Later in Month 20XX insurance assessors agreed to a total write-off and to pay the full insurance amount.
In Month 20XX you received compensation funds from the insurer.
In Mid-Month 20XX the COVID pandemic lockdown occurred and travel restrictions were imposed. You were unable to leave your home to meet with contractors in the area.
In early Month 20XX you engaged an architect to design a similar structure.
In Month 20XX the remains of the Property were removed and the site declared safe (due to asbestos contamination). The Architect was able to visit site after this date.
Late Month 20XX a Bushfire Assessment Consultant was engaged and it was determined that the replacement house was to be built to BAL40 standard with Asset Protection Zone of 30m around the house.
In Month 20XX the House Plans and Bushfire Assessment Plans were submitted to the local council in a Development Application.
In Month 20XX the slab was poured for the erection of garage and storage shed for pre-emptive rebuild of house.
There has been an unprecedented demand for builders in the area. With this and COVID restrictions, it has been difficult to initiate a rebuild.
As of now, there has been a refurbishment of an existing concrete rainwater tank.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 124-75