Private ruling: CGT extension of time/replacement asset
Date of advice: 5 December 2025
Published: 27 January 2026
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner use his discretion to extend the replacement asset period pursuant to the subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) in respect of the small business capital gains tax replacement asset rollover relief until 30 June 2026? | A1: Yes

Relevant facts and circumstances: You acquired your interest in a property in July 20XX with tenants in common. You sold the property in August 20XX. You are also a partner in a partnership. You have had regular communication with agents and inspected several properties however a replacement property could not be found. You realised the price of other properties were increasing over time. You plan to purchase an interest in another property. Valuations have been completed, and you are waiting on the final decision to be made by the sellers before purchasing the interest in the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-190 | Income Tax Assessment Act 1997 subsection 104-190(1A) | Income Tax Assessment Act 1997 subsection 104-190(2) | Income Tax Assessment Act 1997 Subdivision 152-E

Reasons for decision: Summary: You disposed of your interest in a property in 20XX income tax year. You have chosen to apply the Small Business Rollover under Subdivision 152-E of the ITAA 1997 to the capital gain from the disposal of the CGT asset. Having considered your circumstances and the relevant factors, the Commissioner will apply his discretion and extend your replacement asset period to 30 June 20XX. | Detailed Reasoning - Detailed reasoning: Subsection 104-190(1A) states: If you choose a small business roll-over under subdivision 152-E for a CGT event that happens in relation to a CGT asset in an income year, the replacement asset period is the period: a) Staring one year before the last CT event in the income year for which you obtain the roll-over; and b) Ending at the later of: 1) 2 years after that last CGT event; and 2) The first-mentioned CGT event happened because you disposed of the CGT asset 6 months after the latest time a possible financial benefit becomes or could become due under a look-through earnout right relating to the CGT asset and the disposal. Subsection 104-190(2) states: The Commissioner may extend the replacement asset period, or that period as modified by subsection (1). In determining whether to allow an extension of time, Commissioner considers the following factors: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to provide such an extension • whether there is any prejudice to the Commissioner if the additional time is allowed (however, the mere absence of prejudice is not enough to justify the granting of an extension) • whether there is any unsettling of people, other than the Commissioner, or of established practices • the need to ensure fairness to people in like positions and the wider public interest • whether there is mischief involved, and • the consequences of the decision. | Detailed Reasoning - Application to your circumstances: You sold a property and made multiple attempts to purchase a replacement property. You plan to purchase interest in another property. The valuations have been completed, and you are waiting on a final decision to be made by the other owners. After considering these circumstances, the Commissioner considers that you have provided an acceptable explanation for the delay of acquiring a replacement asset and have committed to acquiring one by 30 June 20XX. There appears to be no mischief involved and will be no prejudice to the Commissioner in allowing an extension of the replacement asset period. Therefore, the Commissioner has decided to exercise their discretion under subsection 104-190(2) and extend the replacement asset period until 30 June 20XX.