Private ruling: Extension of time to replace an asset to maintain the small business CGT concession
Date of advice: 4 March 2021
Published: April 2021
Ruling period: Year ending DD MM YYYY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period for Property 1? | A1: Yes. Having considered the relevant factors, and the particular circumstances of your case, the Commissioner will exercise his discretion to extend the replacement asset period for Property 1. | Q2: Will the Commissioner exercise his discretion under subsection 104-190(2) of the ITAA 1997 to extend the replacement asset period for Property 2? | A2: Yes. Having considered the relevant factors, and the circumstances of your case, the Commissioner will exercise his discretion to extend the replacement asset period for Property 2.

Relevant facts and circumstances: You owned 2 parcels of farmland, Property 1 and Property 2. Both parcels of land were actively used in your farming business and Family Trust. You sold Property 1 and Property 2. You made a net capital gain after applying the 50% general discount and the small business capital gains tax (CGT) concessions. At that time you intended to acquire a replacement asset within the 2 year timeframe to avoid triggering CGT event J5. You sustained an injury and have since encountered a number of setbacks due to health issues associated with several hospitalisations and surgeries to treat the injury. The subsequent health issues include infections suffered from the surgeries which have been serious and on at least one occasion was life threatening. Your medical treatment is on-going with no definite end date according to your doctor and as noted in documentation provided by your doctor. In the same year that you sustained the injury, you required X surgeries. In the same year that you sustained the injury, you received treatment for an infection which developed post-surgery. In the following year, you required further surgery. The market for business acquisition had been severely affected due to the impacts of COVID-19 and you have been unable to acquire a replacement asset.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 104-190(2)