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Edited version of private advice
Authorisation Number: 1052007942127
Date of advice: 18 July 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 time limit to apply the small business capital gains tax concessions, regarding a replacement asset roll-over?
Answer
Yes, after taking into consideration the severe business disruptions caused from the COVID-19 pandemic, making due diligence of prospective businesses difficult, and reducing the number of suitable businesses for sale, the Commissioner will exercise his discretion and extend the 2-year period to 20 December 20XX as per subsection 104-190(2) of the ITAA 1997 to apply the CGT small business concessions.
This ruling applies for the following period
Year ending 30 June 20XX
The scheme commences on:
XX August 20XX
Relevant facts and circumstances
A CGT happened on the XX August 20XX which resulted in a gain.
The entity applied the small business 50% CGT discount and the small business 50% active asset reduction to the gain.
The entity then chose to use the small business roll-over to the remainder of the gain allowing up until XX of August 20XX to purchase a new asset.
Due to severe business disruptions from multiple state lockdowns and restrictions from the Covid-19 pandemic, made due diligence of prospective businesses difficult, and reduced number of businesses on the market resulting in a longer search period to find a suitable business to acquire.
A new business was able to be purchased on the XX December 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 104-190(2)