Private ruling: CGT - replacement asset period
Date of advice: 7 July 2022
Published: October 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 20YY

Ruling: Q1: Will the Commissioner extend the replacement asset period to a date in 20XX pursuant to subsection 104-190(2) of the Income Tax Assessment Act 1997 ? | A1: Yes.

Relevant facts and circumstances: You sold your business, and the assets used several years ago. You made a capital gain, and a capital gains tax (CGT) small business concession was available to you. The Commissioner previously accepted that the replacement asset rollover was available to you and has exercised his discretion to extend the replacement asset period. The conditions caused by the COVID-19 pandemic have continued to have a disproportionate effect on all industries, including yours. You have provided details of those effects. You cannot complete acquisitions before the replacement asset period end date allowed in your previous private ruling. You have had some progress in acquiring assets referred to in your previous private ruling and have been pursuing other opportunities. You have provided details of these.

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

Reasons for decision: Summary: All references made in these reasons for decision are to the Income Tax Assessment Act 1997 (ITAA 1997)unless otherwise stated. Having considered the relevant facts, the Commissioner will apply his discretion under subsection 104-190(2) and allow an extension of the time limit to date in 20XX. | Detailed Reasoning - Detailed reasoning: The small business rollover allows you to defer the capital gain made from a CGT event if you acquire one or more replacement assets and satisfy certain conditions. The conditions which must be met to obtain relief are set out in Subdivision 152-A. You must acquire a replacement asset within a period starting one year before and ending two years after the date of disposal of the original asset. Subsection 104-190(2) states that the Commissioner may exercise his discretion to extend those time limits. You have received previous private rulings extending the replacement asset period. In your previous private ruling, the Commissioner allowed an extension of time mainly because of the COVID-19 pandemic and its effect on small business and the wider economy. Since the issue of the most recent private ruling, you have made some progress in the process of acquiring assets. We have considered this, along with the continuation of the COVID-19 related lockdowns and measures and related impacts, which were unforeseen at the time the previous private ruling was issued. The Commissioner will therefore further extend the replacement asset period to date in 20XX. Given the progress you have made in acquiring a replacement asset, it is anticipated there will be no need for any further extension of time.