Private ruling: Capital gains tax
Published: May 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2011

Ruling: Q1: Will the Commissioner, pursuant to subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997), extend the time limit set out in paragraph 104-185(1)(a) of the ITAA 1997 for the replacement asset to be acquired? | A1: Yes.

Relevant facts and circumstances: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: · the application for private ruling, and · the documents provided with the application for private ruling. You and your spouse held an interest in a farm. You and your spouse also run another farm in a different location. The interest in the business and the land were sold in April 2010, resulting in a capital gain. You and your spouse applied the small business rollover concession to a portion of the capital gain. You and your spouse intended to purchase another farm and looked at various properties with your real estate agent. You and your spouse attended an auction and tendered for one property but were unsuccessful. A family member became ill and passed away in January 2011. In February 2011, your business was destroyed by a natural disaster. If a suitable property cannot be found in the next 12 months, you and your spouse will consider purchasing farming equipment as the replacement asset.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-185(a) and | Income Tax Assessment Act 1997 section 104-190(2).

Reasons for decision: Summary: According to the Advance guide to capital gains tax concessions for small business 2010-11 , the small business rollover concession allows an entity to defer a capital gain made from a CGT event if the entity acquires a replacement asset and one or more conditions are satisfied. One of these conditions requires the entity to acquire a replacement asset within a period starting one year before, and ending two years after the date of disposal of the original asset. However, in appropriate circumstances, the Commissioner may extend this period. The abovementioned guide also provides the relevant considerations applied by the Commissioner to extend the two year period. Having regards to your full circumstances and the above principles, the Commissioner will allow an extension of time. Additional information This ruling has not considered your eligibility for the small business rollover concession. You should ensure that you satisfy the basic conditions and the other conditions relevant for the concession. More information is available in the publication Advanced guide to capital gains tax concessions for small business 2010-11 (NAT 3359), which is available on our website www.ato.gov.au.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.