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Edited version of private advice
Authorisation Number: 1052155521990
Date of advice: 16 August 2023
Ruling
Subject: CGT - rollover relief
Question
Will the Commissioner exercise discretion to extend the replacement asset period, pursuant to subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to DDMMYY?
Answer
Yes, given the circumstances you have outlined, it would be fair and reasonable for the Commissioner to grant an extension of the asset replacement period to DDMMYY.
Further information on the small business replacement asset rollover can be found on our website by searching for QC 52291.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commenced on:
DDMM 20XX
Relevant facts and circumstances
The Taxpayer sold an active asset under a Sale and Purchase Deed which resulted in a capital gain
The Taxpayer accessed the small business CGT concessions to reduce the taxable gain and utilised the CGT replacement asset rollover provisions under subsection 152-410 of the ITAA 1997 to defer the gain. The replacement asset period per the application of section 104-190(1A)(b) is MM 2019 to MM 2022.
Covid19 and the associated impacts contributed to delay in purchasing of commercial premise, contract was signed and settled X months outside the two-year asset replacement period.
The replacement asset is being used actively in the business of a connected entity.
The consideration on the sale of the active asset included a vendor finance component, final payment was received in MM of 2023.
The Taxpayer settled a marriage breakdown by Consent Orders handed down in MM of 2022.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-190(2)