Edited version of private advice

Authorisation Number: 1051952442268

Date of advice: 23 February 2022

Ruling

Subject: CGT- small business concession

Question

Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to DD MM YYYY in respect of the small business capital gains tax (CGT) replacement asset roll-over relief?

Answer

Yes. Having considered your circumstances and the relevant factors, the Commissioner will exercise his discretion under subsection 104-190(2) of the ITAA 1997 and allow an extension of time until DD MM YYYY.

Further information on the relevant factors of small business CGT Rollover generally can be found on our website ato.gov.au and entering Quick Code QC52291 into the search bar at the top right of the page.

Further issues for you to consider

We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the entity is entitled to the small business CGT concessions, the Commissioner has not considered whether the entity satisfies all the requirements of the small business CGT concessions. More information about the concessions can be found by searching Quick Code QC 22655 on ato.gov.au.

This ruling applies for the following period:

DD MM YYYY

The scheme commences on:

DD MM YYYY

Relevant facts and circumstances

You sold an active CGT small business asset on DD MM YYYY.

The CGT event resulted in a capital gain to which you applied the small business roll over concession under subdivision 152E of the ITAA 1997.

The original rollover amount was $X.

From DD MM YYYY to DD MM YYY, you engaged with agents and enquired about several properties however there was a lack of suitable land in your preferred location, natural disaster had affected the region and COVID-19 travel restrictions impacted your ability to inspect properties.

On DD MM YYYY you entered a contract to acquire a property as a replacement CGT asset and settlement occurred on DD MM YYYY.

After settlement, you actively attempted to complete required improvements on the property. The works were delayed due to a shortage of labour and materials associated with COVID-19.

On DD MM YYYY, you completed the improvements on the property.

You have stated you met the 'basic conditions' for CGT small business concession under section 152-10 of the ITAA 1997 and the improvement works will meet the requirement of replacement assets under Subdivision 152-E of the ITAA 1997.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 104-190(2)