Private ruling: CGT - replacement asset
Date of advice: 24 September 2015
Published: September 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 124-75(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time required to obtain a replacement asset? | A1: Yes

Relevant facts and circumstances: You owned the Property which was acquired by a government authority under the Scheme. You have been advised by the ATO that you may choose to apply the rollover contained in Subdivision 124-B of the ITAA 1997 to the capital gain made on the disposal of the Property. Circumstances specific to the Scheme will mean there will be some delay before you are able to acquire a replacement asset.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 124-75(3)

Reasons for decision: Summary: Subdivision 124-B of ITAA 1997 explains the circumstances when a rollover is available for an asset that is compulsorily acquired, lost or destroyed. If you receive money as a result of the disposal, you can only choose a rollover if you incur expenditure in acquiring another CGT asset. Under subsection 124-75(3) of the ITAA 1997, you must incur at least some of the expenditure no earlier than one year before the event happens or, within one year after the end of the income year in which the event happens. The expression 'special circumstances' in subsection 124-75(3) of the ITAA 1997 by its nature is incapable of a precise or exhaustive definition. Taking your full circumstances into account, the Commissioner will allow an extension of time.