Edited version of private advice

Authorisation Number: 1052031223737

Date of advice: 7 September 2022

Ruling

Subject: CGT - small business concession - extension of time - rollover relief

Question

Will the Commissioner exercise the discretion under paragraph 124-75(3)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time, until 30 June 2023, for you to acquire replacement assets?

Answer

Yes. The Commissioner will exercise his discretion under paragraph 124-75(3)(b) of the ITAA 1997 to allow an extension of time until 30 June 2023 to replace the compulsorily acquired assets.

This ruling applies for the following periods:

Year ending 30 June 2015

Year ending 30 June 2016

Year ending 30 June 2017

Year ending 30 June 2018

Year ending 30 June 2019

Year ending 30 June 2020

Year ending 30 June 2021

Year ending 30 June 2022

Year ending 30 June 2023

The scheme commences on:

1 July 2015

Relevant facts and circumstances

This private ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are different from these facts, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

Prior to 20 September 1985, you acquired a commercial rental property (the property).

The property was compulsory acquired by a third party and you received compensation.

Since the date of acquisition, you have been in negotiations with the third party requesting additional compensation and have successful received two additional compensation payments.

You have acquired one replacement asset using a portion of the compensation amount. You intend to acquire another replacement asset to use the remaining compensation amount.

On three separate occasions, you have applied for an extension of time for the replacement asset period, which have been granted by the Commissioner.

Over the years you have identified numerous properties and for various reasons, chosen not to proceed with their acquisition.

You have been impeded from finding a replacement asset due to the following reasons:

•                    Qld Chief Health Officer public health directions imposed restrictions for auctions and open homes due to the ongoing COVID-19 outbreak.

•                    COVID-19 lockdowns and quarantine requirements

•                    High risk of serious illness from COVID-19 due to the age of the company's sole director.

•                    Outbid by competitors in the market or couldn't negotiate agreeable terms with the seller.

•                    Contract prices being over the maximum amount of the replacement asset.

You have now extended your search for a replacement asset further north of the current area you have been searching.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 104-10

Income Tax Assessment Act 1997 Subdivision 124-B

Income Tax Assessment Act 1997 Section 124-70

Income Tax Assessment Act 1997 Section 124-75