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Edited version of private advice
Authorisation Number: 1052315567576
Date of advice: 17 October 2024
Ruling
Subject: CGT - replacement asset roll-over
Question 1
Does the amalgamation of licence 1 and licence 2 into licence 3 meet the criteria of a replacement asset roll-over for a statutory licence under Subdivision 124-C of the Income Tax Assessment Act (ITAA) 1997?
Answer
Yes. The amalgamation of licence 1 and licence 2 into licence 3 meets the criteria of a replacement asset roll-over of a statutory licence under Subdivision 124-C of the ITAA 1997. This is because licence 1 and licence 2 was ended; as a result, you were issued licence 3 which allowed you to carry on the same activities as licence 1 and licence 2. Therefore, a replacement asset roll-over has occurred for the amalgamation of licence 1 and licence 2.
Question 2
Are you eligible for the 15-year exemption on the upcoming sale of licence 3 under Subdivision 152-B of the ITAA 1997?
Answer
Yes. You are eligible for the 15-year exemption under Subdivision 152-B of the ITAA 1997 because of the following:
1) You meet the basic conditions under section 152-10 of the ITAA 1997.
2) You are considered to have owned licence 3 continuously for over 15 years. When you acquire a CGT asset as a result of a replacement asset roll-over, you are taken to have acquired the asset when you obtained the original asset involved in the roll-over under section 115-30 of the ITAA 1997. Therefore, you are taken to have owned licence 3 from the date you acquired licence 1.
3) You are over the age of 55 and the sale of licence 3 is in connection with your retirement.
This ruling applies for the following period:
X of XX 20XX
The scheme commenced on:
X of XX 20XX
Relevant facts and circumstances
You were born on X of XX XXXX
You purchased licence 1.
You carry on business in partnership with your spouse.
You decided sell licence 1. The sale of the licence was rejected.
You purchased licence 2.
Licence 1 and Licence 2 were amalgamated together to create licence 3.
Licence 1 was cancelled.
Licence 2 was cancelled.
You currently have licence 3 for sale.
You have reduced your working hours in a move towards retirement.
The sale of licence 3 is connected to your retirement.
Relevant legislative provisions
Income Tax Assessment Act section 108-5
Income Tax Assessment Act section 115-30
Income Tax Assessment Act section 124-140.
Income Tax Assessment Act section 152-10
Income Tax Assessment Act section 152-40
Income Tax Assessment Act section 152-105