Private ruling: CGT - small business concessions
Date of advice: 18 July 2022
Published: October 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: XX August 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 104-190(2)of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to apply the small business capital gains tax concessions, regarding a replacement asset roll-over? | A1: Yes, after taking into consideration the severe business disruptions caused from the COVID-19 pandemic, making due diligence of prospective businesses difficult, and reducing the number of suitable businesses for sale, the Commissioner will exercise his discretion and extend the 2-year period to 20 December 20XX as per subsection 104-190(2) of the ITAA 1997 to apply the CGT small business concessions.

Relevant facts and circumstances: A CGT happened on the XX August 20XX which resulted in a gain. The entity applied the small business 50% CGT discount and the small business 50% active asset reduction to the gain. The entity then chose to use the small business roll-over to the remainder of the gain allowing up until XX of August 20XX to purchase a new asset. Due to severe business disruptions from multiple state lockdowns and restrictions from the Covid-19 pandemic, made due diligence of prospective businesses difficult, and reduced number of businesses on the market resulting in a longer search period to find a suitable business to acquire. A new business was able to be purchased on the XX December 20XX.

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