Private ruling: Roll-over - extension of time
Date of advice: 19 May 2026
Published: 10 August 2026
Ruling period: DD MM YYYY to DD MM YYYY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Does the applicant satisfy the requirements in Subdivision 124-B of the Income Tax Administration Act 1997 (ITAA 1997) for the rollover? | A1: No. | Q2: If the answer to Q1 is yes, will the Commissioner exercise discretion pursuant to subsection 124-75(3) of the ITAA 1997and allow an extension of time in which to spend at least some of the proceeds received by the applicant, in order to meet the eligibility requirements for a Subdivision 124-B of the ITAA 1997roll-over? | A2: As the answer to Q1 is no, this is not applicable. | Q3: If the applicant is successful in receiving an extension of time from the Commissioner in respect of Q2, will the Commissioner allow a further extension of time until DD MM 20YY for the applicant to acquire a replacement asset? | A3: Not applicable.

Relevant facts and circumstances: Background Information 1. AAA was incorporated on DD MM YYYY and is the head company of an income tax consolidated group. 2. AAA's subsidiaries undertake various activities related to development and investment. 3. DDD has been a subsidiary within the income tax consolidated group since its incorporation on DD MM YYYY. 4. DDD was an Australian resident for income tax purposes just before the disposal of the Property. The Property 5. DDD acquired the Property located at XXX on DD MM YYYY for $xyz, plus stamp duty and incidental costs of $xyz. 6. The Property consists of several lots across different titles. 7. DDD acquired the Property as a long-term investment for capital growth. The applicant saw the potential for capital growth due to the location of the Property being just over one hour from XXX and 30 minutes from the proposed XXX Facility. The Property also presented unique ecological and topographical characteristics that were appealing. Further, the former owner was motivated for an expedient sale, as the applicant understood they were looking to dispose of its assets as part of winding down of its Australian operations. Thus, taken with the above factors, the applicant considered the price it negotiated to acquire the Property made for a good long-term investment. 8. Prior to the disposal of the property to the NNN on DD MM YYYY, by agreement, DDD had leased the property and derived rental income from a number of lessees. 9. DDD had not lodged any development applications with respect to the Property. 10. The NNN expressed its interest in acquiring the Property, via a letter dated DD MM YYYY, for the purposes of preserving the land as a national park (henceforth, the EOI Letter). The EOI Letter stated that the Property was situated in an area that had been identified as having the potential to provide important long-term biodiversity protection under the XXX Government's Conservation Plan. 11. Specifically, the NNN, on behalf of the Minister administering the National Parks and Wildlife Act 1974 , sought to acquire the Property by agreement under the Land Acquisition (Just Terms Compensation) Act 1991 . 12. Included in the EOI Letter was a non-binding expression of interest form for the applicant to engage in discussions with the NNN about the proposed acquisition of the Property. The EOI Letter stated that if the applicant was not currently interested in selling their property, to please indicate whether they were open to the NNN approaching them again in 20XX. This was signed by FFF as the Director of DDD, on DD MM YYYY. The signed EOI form consented to NPWS contacting FFF to explore the disposal of the Property. 13. An initial meeting was held with representatives of NNN and DDD on DD MM YYYY at the applicant's office in XXX. 14. During this meeting, the NNN representatives attested that: a. The Property was required to be acquired by the NNN to create the east-west corridor between existing protected lands. Specifically, it aims to extend the XX Reserve and ZZ Conservation Area and connect them with the YY Conservation Area. This extended reserve would create an important biodiversity corridor and increase public access to green spaces that are currently heavily used; b. Threatened ecological communities and species were present on the Property; c. The Property contains areas that is of cultural significance to the Aboriginal people; d. The NNN had considered acquiring the Property in YYYY when it was marketed for sale by the former owner. However, at the time, the NNN did not have the budget to acquire the Property; and e. The NNN already owned, or were in the process of completing acquisitions of, the parcels of land surrounding the Property. Thus, the Property was one of few parcels that had not yet been acquired and was critical to opening up a natural corridor between the east and west locations of existing protected land. Based on these discussions, FFF understood that it would be in the applicant's best interest to cooperate and work with the NNN to ensure the best financial outcome was achieved. This understanding was on the basis that the NNN could ultimately force a sale through a compulsory acquisition if the applicant did not wish to proceed with a sale by agreement. 15. DDD had only acquired the Property less than x years prior to being approached by the NNN. It was therefore not FFF's preference to dispose of this investment so soon after the initial acquisition, given their objective to retain the Property for long-term capital growth. 16. However, based on the initial meeting with the NNN and subsequent discussions and correspondence, it was FFF's understanding that: a. If they did not agree to dispose of the Property by mutual agreement, the NNN would have exercised its powers to compulsorily acquire the Property under the Land Acquisition (Just Terms Compensation) Act 1991 ; and b. Working with the NNN through a sale under voluntary agreement would provide the applicant with a better opportunity to achieve the best financial outcome, instead of a sale under compulsory acquisition. The intention of the NNN to acquire the Property 17. Whilst the Property was acquired by the NNN by agreement, the applicant was of the understanding that the Property was intended to be compulsorily acquired under the NNN's statutory powers, should FFF not enter into the sale process by agreement. 18. NNN's conservation plan highlights that "Conservation Land" could be compulsorily acquired where the land is critical for creating a proposed conservation reserve and a voluntary purchase was not successful, but that this would only occur in limited circumstances for 'critical' acquisitions. 19. The EOI Letter further indicated that if the applicant was not interested in entering into discussion to sell the Property in YYYY, the NNN would like to approach the discussions again in YYYY. 20. The NNN's interest in the Property was due to it being situated in an area identified as "Conservation Land" within a "Strategic Conservation Area". 21. In addition, the NNN had represented to FFF, their Group CFO and Group Financial Controller that all other parcels of land surrounding the Property that formed part of the Strategic Conservation Area had already been acquired or was in the process of being acquired. Accordingly, FFF felt that they ultimately had no choice but to agree to dispose of the Property to the NNN. 22. The applicant further highlights that the consideration which the NNN agreed to pay for the Property was below the market value compared to valuations DDD had independently engaged. In fact, the $xx million proceeds received by the applicant for the disposal of the Property was even below the YYYY valuation (x years prior to the disposal to the NPWS) the applicant had sought at the time, which was based on comparable sales of rural sites that had been recently transacted upon. However, the applicant acknowledged the consideration must be in accordance with a due process set out in the Land Acquisition (Just Terms Compensation) Act 1991 , which applies to the Government's acquisition of land by agreement and compulsory acquisition. The Sale Process 23. The NNN engaged a valuer for a valuation of the Property on DD MM YYYY, prior to the agreement for sale was entered into. It was noted in the brief to the valuer that the NNN intended to acquire the Property by agreement, for the purposes of establishing a national park, under the Land Acquisition (Just Terms Compensation) Act 1991 . 24. DDD subsequently entered into the contract to dispose of the Property on DD MM YYYY (being the DD MM YYYY income year), for $xx million (the Transaction). 25. The NNN is an Australian Government agency. Summary of Circumstances in the Disposal of the Property to the NPWS 26. The circumstances surrounding the Property's disposal to NNN establish that its acquisition was not merely incidental but directly aligned with conservation priorities and statutory processes. Where a voluntary agreement was not successfully achieved, a compulsory acquisition under the Land Acquisition (Just Terms Compensation) Act 1991 was within the powers and plan of the NNN. These factors are summarised below: • Discussions with representatives from the NNN had confirmed the strategic significance of the Property. • The Property was specifically identified as a Strategic Conservation Area within the XXX Reserve Area, underscoring its importance for the protection of threatened ecological communities and species listed under both the BC Act and the EPBC Act. • Further, the Property was classified as "Conservation land" and earmarked for the establishment of a new national park. • Where "Conservation land" cannot be acquired through voluntary agreement, the NNN may seek to enforce compulsory acquisition. Replacement Asset 27. The applicant has begun to make efforts to locate and acquire a suitable replacement asset. Below is a timeline outlining this: • DD MM YYYY -FFF, as Director of the applicant, reached out to a sales agent for the Property on behalf of the former owner expressing their disappointment in being "forced to sell" the Property to the NPWS and their assistance in finding a replacement site. • DD MM YYYY - Sales Agent provided details of some sites in suburbs that may be comparable replacement investments for the Property. • DD MM YYYY - Sales Agent provided details of a site located in XXX. • DD MM YYYY - Sales Agent provided details of a site located in XXX and XXX. • DD MM YYYY - XYZ Real Estate providing details of a site located in XXX. The applicant considered this opportunity; however ultimately decided that it was not an appropriate investment. 28. Since MM YYYY until the present time: • FFF has engaged with external property agents in a more structured manner to find a replacement asset. • The applicant has been presented with over x investment opportunities from external property agents. FFF, together with their Senior Management, have considered these opportunities - assessing the potential investment returns and impact of these potential investments on the investment profile of the broader Group. • The applicant notes that the property market generally slows down in MM/MM, due to the holiday season in Australia. Thus, there has been a lack of opportunities presented in recent months, which has contributed to the applicant's delay in identifying an appropriate replacement asset in early YYYY. Having said that, FFFF has reinforced their desire to promptly find an appropriate replacement asset to external property agents they have continued to engage with in their discussions with them in early YYYY. • The applicant has widened its search for a replacement asset beyond the XXX geographical area and has been considering opportunities between xxkm - xxkm away from XXX due to the lack of available investment opportunities on the market. In Summary 29. The amount required to be invested ($xyz) in a suitable replacement asset is significant. The applicant's own internal governance process requires the replacement asset to generate appropriate investment returns and meet the investment profile of the broader group. 30. Suitable opportunities require careful assessment to ensure appropriate risk-adjusted returns in a high interest rate and uncertain global and domestic economic environment, driven by geopolitical instability and inflationary pressures. 31. The replacement asset would ideally also provide a similar investment and risk profile as the Property, which the applicant had considered a good long-term investment prior to the NNN approaching the applicant to acquire this. However, the market for similar assets / investment opportunities have been limited. 32. As a result, the applicant has sought to widen its geographical search for a replacement asset. Information provided 33. You have provided a number of documents containing detailed information in relation to the application, including: • Private Binding Ruling ('PBR') Application, dated DD MM YYYY • Response to further questions provided DD MM YYYY 34. We have referred to the relevant information within these documents in applying the relevant tests to your circumstances.

Relevant legislative provisions: Income Tax Administration Act 1997 Subdivision 124-B | Income Tax Administration Act 1997 Subsection 104-10(1) | Income Tax Administration Act 1997 Subsection 104-10(2) | Income Tax Administration Act 1997 Subsection 124-70(1) | Income Tax Administration Act 1997 Paragraph 124-70(1)(c) | Income Tax Administration Act 1997 subsection 124-70(2) | Income Tax Administration Act 1997 subsection 124-70(3) | Income Tax Administration Act 1997 subsection 124-70(4) | Income Tax Administration Act 1997 subsection 124-75(2) | Income Tax Administration Act 1997 subsection 124-75(3)

Reasons for decision: Summary: All legislative references are to the Income Tax Assessment Act 1997 ('ITAA 1997') unless otherwise stated. The applicant does not satisfy the requirements in Subdivision 124-B of the Income Tax Administration Act 1997 (ITAA 1997) for the rollover. As the answer to Q1 is no, the questions about the application of the discretion pursuant to subsection 124-75(3) of the ITAA 1997 are not applicable. | Detailed Reasoning - Subsection 104-10(1) ITAA 1997: 35. Subsection 104-10(1) of the ITAA 1997 outlines that a Capital Gains Tax (CGT) event A1 happens if a taxpayer disposes of a CGT asset. | Detailed Reasoning - Subsection 104-10(2) ITAA 1997: 36. Subsection 104-10(2) of the ITAA 1997 outlines that a taxpayer disposes of a CGT asset if a change of ownership occurs from the taxpayer to another entity, whether because of some act or event or by operation of the law. The timing of the event is when the contract is entered into for disposal pursuant to subsection 104-10(3) of the ITAA 1997. | Detailed Reasoning - Subdivision 124-B - Asset compulsorily acquired, lost or destroyed: 37. Roll-over relief for the compulsory acquisition of a CGT asset is available where the conditions outlined in Subdivision 124-B of the ITAA 1997 are met. Subdivision 124-B outlines the requirements for a replacement asset roll-over where an original asset has been compulsorily acquired, lost or destroyed. A replacement asset rollover allows an entity to defer the making of a capital gain or loss from one CGT event until a later CGT event happens. 38. Subdivision 124-B- of the ITAA 1997 deals with assets compulsorily acquired, lost or destroyed. Specifically, section 124-70 of the ITAA 1997 outlines the events giving rise to a CGT roll-over, as follows: (1) You may be able to choose a roll-over if one of these events happens to a CGT asset (the original asset) you own: (a) it is compulsorily acquired by an Australian government agency; (aa) it is compulsorily acquired by an entity (other than an Australian government agency or a foreign government agency) under a power of compulsory acquisition conferred by a law covered under subsection (1A); (b) it, or part of it, is lost or destroyed; (c) you dispose of it to an entity (other than a foreign government agency) in circumstances meeting all of these conditions: (i) the disposal takes place after a notice was served on you by or on behalf of the entity; (ii) the notice invited you to negotiate with the entity with a view to the entity acquiring the asset by agreement; (iii) the notice informed you that if the negotiations were unsuccessful, the asset would be compulsorily acquired by the entity; (iv) the compulsory acquisition would have been under a power of compulsory acquisition conferred by a law covered under subsection (1A). 39. Specifically, under paragraph 124-70(1)(c), a taxpayer may choose a replacement asset roll-over in the event that it disposes of a CGT asset (i.e. the original asset) to an entity other than a foreign government agency in circumstances meeting all of these conditions: i the disposal takes place after a notice was served on the taxpayer by or on behalf of the entity; ii the notice invited the taxpayer to negotiate with the entity with a view to the entity acquiring the asset by agreement; iii the notice informed the taxpayer that if the negotiations were unsuccessful, the asset would be compulsorily acquired by the entity; and iv the compulsory acquisition would have been under a power of compulsory acquisition conferred by a law covered under subsection (1A). 40. The requirement in subparagraph 124-70(1)(c)(iv) (above) is satisfied if the power of compulsory acquisition is covered in a law that is: (a) An Australian law (other than Chapter 6A of the Corporations Act 2001 ); or (b) A foreign law (other than a foreign law corresponding to Chapter 6A of the Corporations Act 2001 ). 41. In addition to the above, under subsection 124-70(2) of the ITAA 1997, a taxpayer must receive money or another CGT asset (except a car, motorcycle or similar vehicle), or both: (a) as compensation for the event happening; or (b) under an insurance policy against the risk of loss or destruction of the original asset. 42. Under subsection 124-70(3) of the ITAA 1997, where the taxpayer is a foreign resident just before the event happens, or the taxpayer is a trustee of a trust that is a foreign trust for CGT purposes for the income year in which the event happens, further requirements under subsection 124-70(4) are also required to be satisfied. 43. In accordance with subsection 124-70(4) of the ITAA 1997, the original asset must be taxable Australian property just before the event happens and the other asset must also be taxable Australian property just after it is acquired by the taxpayer. | Detailed Reasoning - Additional requirements if money is received: 44. A further requirement is that the owner of the original asset must receive money or another CGT asset or both, for the CGT event to be eligible for a rollover (subsection 124-70(2) of the ITAA 1997). On satisfying these conditions, section 124-75 of the ITAA 1997 provides other requirements which must be satisfied if money is received for the event happening. 45. Paragraph 124-75(2)(a) of the ITAA 1997 states that if you receive money for the CGT event happening, you can choose to obtain a roll-over if you incur expenditure in acquiring another CGT asset (except a depreciating asset whose decline in value is worked out under Division 40 or deductions which are calculated under Division 328). | Detailed Reasoning - APPLICATION TO YOUR CIRCUMSTANCES: 46. As noted in the Background Information section, DDD has been a subsidiary within the AAA income tax consolidated group since its incorporation on DD MM YYYY. 47. Section 701-1 of ITAA 1997sets out the 'single entity rule' (SER) to treat the subsidiary members of the group as parts of the head company, rather than as separate entities during the period of consolidation for the purposes of determining the income tax liability of the head company and the subsidiary members. 48. Taxation Ruling TR 2004/11 Income tax: consolidation: the meaning and application of the single entity rule in Part 3-90 of the Income Tax Assessment Act 1997(TR 2004/11) sets out the Commissioner's view on the application of the SER. Paragraph 31 of TR 2004/11 states: "A consequence flowing from the SER is that while an entity is a subsidiary member of a consolidated group, actions and transactions of that member are treated as having been undertaken by the head company. In addition, the assets owned by subsidiary members of the group are taken to be owned by the head company (other than assets where the rights and obligations are between members of the group)". 49. In this matter, when the Transaction occurred, CGT Event A1 was triggered for the applicant as the head company of the income tax consolidated group. | Detailed Reasoning - Requirements of paragraph 124-70(1)(c) of ITAA 1997: 50. Relevantly, under paragraph 124-70(1)(c), a taxpayer may choose a replacement asset roll-over in the event that it disposes of a CGT asset (i.e. the original asset) to an entity other than a foreign government agency in circumstances meeting all of these conditions: i the disposal takes place after a notice was served on the taxpayer by or on behalf of the entity; ii the notice invited the taxpayer to negotiate with the entity with a view to the entity acquiring the asset by agreement; iii the notice informed the taxpayer that if the negotiations were unsuccessful, the asset would be compulsorily acquired by the entity; and iv the compulsory acquisition would have been under a power of compulsory acquisition conferred by a law covered under subsection (1A). 51. Under sub-paragraph 124-70(1)(c)(i), which requires the disposal takes place after a notice was served on the taxpayer by or on behalf of the entity, the disposal of the Property took place after a notice was served on the applicant by the NPWS via an EOI Letter dated DD MM YYYY. This criterion does not articulate that the notice needs to specify any particular conditions, just that it needs to be served on a taxpayer before a disposal of property takes place. Thus, the requirement in sub-paragraph 124-70(1)(c)(i) is satisfied. 52. Under sub-paragraph 124-70(1)(c)(ii), which requires the notice to invite you to negotiate with the entity with a view to the entity acquiring the asset by agreement, it is evident that the NNN invited the applicant to negotiate with a view of NPWS acquiring the Property by agreement. This criterion articulates specifically that the notice must invite a taxpayer to negotiate with the entity with a view to the entity acquiring the property by agreement. Expressly, the EOI Letter articulated that the NNN was looking to purchase properties in the area of the Property for future addition to national parks estate. The EOI Letter further enclosed an Expression of Interest Form, but if this was not considered at this time, it went on to request whether they were open to being contacted again in YYYY. Thus, the requirement in sub-paragraph 124-70(1)(c)(ii) is satisfied. 53. Sub-paragraph 124-70(1)(c)(iii) requires the notice to inform the taxpayer that if the negotiations are unsuccessful, the asset will be compulsorily acquired by the entity. This criterion specifically articulates that "the notice" must inform the taxpayer of compulsory acquisition being the alternative to successful negotiations. The notice must go beyond merely inviting negotiations, and it must expressly state that failure to reach agreement will result in compulsory acquisition of the asset by the entity.. 54. It is evident that within the notice (the EOI Letter) there is no mention of compulsory acquisition if negotiations are unsuccessful. 55. The Background Information section above includes the relevant references and excerpts from Conservation plan, confirming the Property is classified as "Conservation land". However, as explained in in the plan, compulsory acquisition will only be used in limited circumstances to acquire land that is critical for creating a proposed conservation reserve. There is nothing in the applicant's submissions that indicates whether the Property would satisfy the limited circumstances, or whether the land is critical for creating a proposed conservation reserve. 56. The Background Information section sets out the discussions between the NNN and the applicant, which led the applicant to understand that if it did not consent to dispose of the Property by agreement, the property would have be compulsorily acquired if acquisition on a voluntary basis was not successful. The applicant's submissions often refer to. FFF's "understanding" of the negotiations, and that if they failed, the property would be compulsorily acquired. It is evident that. FFF had nothing in writing in the notice to confirm this understanding. 57. There was nothing in the EOI Letter which made it clear that if negotiations were not successful, the asset would be compulsorily acquired. Thus, the requirement in sub-paragraph 124-70(1)(c)(iii) is not satisfied. 58. Under sub-paragraph 124-70(1)(c)(iv), the compulsory acquisition is required to be under a power of compulsory acquisition conferred by a law covered under subsection (1A). A law is covered by subsection (1A) if it is an Australian law, which according to section 995-1 of ITAA 1997, means: (a) Commonwealth law - A law of the Commonwealth; (b) State law - A law of a State; (c) Territory law - A law of a Territory. 59. The documentation provided by the applicant references compulsory acquisition under a relevant state law covered under subsection (1A). 60. Based on the above, the requirement in subparagraph 124-70(1)(c)(iv) is satisfied. 61. In summary, under subsection 124-70(1)(c) of the ITAA 1997, a taxpayer may choose a replacement asset roll-over in the event that it disposes of a CGT asset to an entity other than a foreign government agency in circumstances meeting all of the 4 conditions as laid out in sub-paragraphs (i) through to (iv). As the applicant has failed to satisfy sub-paragraph 127-70(1)(c)(iii), the applicant does not satisfy the requirements in Subdivision 124-B of the ITAA 1997 for the rollover. | Detailed Reasoning - CONCLUSION: The applicant does not satisfy the requirements in Subdivision 124-B of the Income Tax Administration Act 1997 (ITAA 1997) for the rollover. As the answer to Q1 is no, the questions about the application of the discretion pursuant to subsection 124-75(3) of the ITAA 1997are not applicable.

ATO view documents: Tax Determination TD 2000/40 "Income tax: capital gains: what are 'special circumstances' for the purposes of subsection 124-75(3) of the Income Tax Assessment Act 1997?".