Private ruling: Capital gains tax - replacement asset extension of time
Date of advice: 10 July 2020
Published: August 2020
Ruling period: Financial Year ending 30 June 2019 | Financial year ending 30 June 2020 | Financial year ending 30 June 2021
Date scheme commenced: 01 July 2018

Ruling: Q1: Will the Commissioner exercise his discretion pursuant to subsection 124-75(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow up until 30 June 2021, for the taxpayers to incur expenditure in acquiring a replacement CGT asset? | A1: Yes, having considered the circumstances of both trusts and relevant factors, the Commissioner considers it appropriate to grant an extension of the replacement asset period. Further information can be found be searching 'QC 17204' on ato.gov.au

Relevant facts and circumstances: You were previously the registered owners of land located XYZ, which was compulsorily acquired. You have acquired one replacement building however, the contract for purchase of a second building was not completed. As the second contract failed to complete only recently you have not been able to find another replacement building within the 12 months from the compulsory acquisition. Both replacement properties have been / will be used for a similar purpose as the original land (being in the activity of generating rental income) satisfying the requirements of subsection 124-75(5) of the ITAA1997.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 124-70 | Income Tax Assessment Act 1997 Section 124-75 | Income Tax Assessment Act 1997 Section 995-1