Edited version of private advice

Authorisation Number: 1051998419438

Date of advice: 28 June 2022

Ruling

Subject: CGT - small business concessions

Question

Will the Commissioner exercise the discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period back to XX/XX/20XX to allow you to choose Property 2, acquired more than one year before the disposal of Property 1, as the replacement asset?

Answer

Yes.

Having regard to your full circumstances and the acceptable explanation for the period of extension you have requested, the Commissioner considers the extension would be fair and equitable. Further information on the small business rollover can be found on by searching 'QC 52291' on ato.gov.au.

This ruling applies for the following periods:

year ended 30 June 20XX

year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You acquired Property 2.

Less than two weeks later, you entered a contract to sell Property 1 to ABC Pty Ltd.

Approximately one year later, the sale of Property 1 to ABC Pty Ltd fell through.

Another purchaser XYZ Pty made a formal offer for Property 1 but the offer was withdrawn before acceptance.

Later, ABC Pty was again in a position to proceed with the original contract. The contract was then signed to sell Property 1 to ABC Pty Ltd.

A capital gain of was made on the sale Property 1. You would like to apply a small business roll-over under Subdivision 152-E of the ITAA 1997 to the capital gain, however you acquired the replacement asset (Property 2) more than 12 months prior to the CGT event for Property 1.

At the time that you purchased Property 2, Property 1 was already listed for sale and you were confident that its sale would be imminent. It was your intention at the time of purchasing Property 2, that it would be the replacement asset for Property 1.

Relevant legislative provisions

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