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Edited version of private advice
Authorisation Number: 1052238628872
Date of advice: 8 April 2024
Ruling
Subject: Capital gains tax - small business concessions
Question
Will the Commissioner exercise the discretion in subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to 30 June 20YY?
Answer
Yes, having considered your circumstances and the relevant factors, the Commissioner will use the available discretion to grant you further time to acquire a replacement asset. You and the trust have acquired a replacement asset within the required two-year period but cannot use it for business purposes until the relevant works are completed. This is an acceptable explanation for the period of extension requested.
This ruling applies for the following periods:
Year ending 30 June 20YY
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
You and the trust and two other entities sold shares in a company.
You and the trust each made a capital gain in the 20YY financial year and part of the capital gain was deferred under the small business capital gains tax (CGT) rollover.
You and the trust together bought a replacement asset in March 20YY property A to start the business.
The business could not operate from property A due to council restrictions.
The business requires machinery which causes noise and council did not permit use of that machinery on the premises.
You and the trust had already made investment into property A and had started buying machinery for the business.
You and the trust sold property A in January 20YY.
You and the trust have looked for a new commercial property to run the business.
You and the trust together have purchased property B in January 20YY.
You and the trust are still in the process of developing the building to be able to be used in the business.
The developer has advised that the building won't be ready for approximately 2-3 months.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 104-190(2)
Income Tax Assessment Act 1997 subdivision 152-E