Private ruling: Commissioner's discretion
Date of advice: 8 May 2026
Published: 20 July 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in subsection 104-190(2) to extend the replacement asset period by 6 months to XX XXX 20XX? | A1: Yes.

Relevant facts and circumstances: Company was wholly owned by the Family Trust from incorporation until its disposal. On XX XXX 20XX, The Trustee for the Family Trust entered into a share sale agreement to dispose of 100% of the shares in the Company to an unrelated party. Settlement of the transaction was delayed due to extended due diligence and financing approval processes, resulting in multiple contract variations. The sale ultimately settled on XX XXX 20XX, with final proceeds received on XX XXX 20XX. As a result of the disposal, the Family trust made a capital gain in the 20XX income year. After applying available concessions, the Family Trust chose to apply the small business CGT rollover under Subdivision 152-E, deferring the remaining gain. Following settlement, the trustee actively pursued suitable replacement assets within the required period. Efforts were focused on investments aligned with the trustee's experience in X development and other small business opportunities. However, the trustee encountered delays due to: • Limited availability of suitable X development opportunities within the XXXXXX market. • The need to undertake preliminary work (including feasibility and design) for potential projects; and • Ongoing commercial negotiations with third-party businesses regarding equity investments. Despite these efforts, a suitable replacement asset was not secured within the standard replacement asset period. On XX XXX 20XX, the Family Trust entered into a share purchase agreement to acquire a X% interest in a new company for $X. This entity satisfies the relevant small business CGT concession conditions, and the acquired shares are intended to constitute a replacement asset. The trustee continues to negotiate for a further equity interest in that entity. Accordingly, an extension of time is sought to allow the acquisition of the replacement asset to fall within the rollover requirements.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-E | Income Tax Assessment Act 1997 section 152-410 | Income Tax Assessment Act 1997 subsection 104-190(1A) | Income Tax Assessment Act 1997 subsection104-190(2)

Reasons for decision: Summary: Under section 152-410 of the ITAA 1997, you can choose to obtain a roll-over even if a replacement asset has not yet been acquired. Subsection 104-190(1A) of the ITAA 1997 outlines the replacement asset period for small business roll-overs under subdivision 152-E of the ITAA 1997. The replacement asset period starts one year before the last CGT event and ends 2 years after that CGT event. The Commissioner has the discretion to extend the replacement asset period as per subsection 104-190(2) of the ITAA 1997. Following receipt of the full share sale proceeds on XX XXX 20XX, you made genuine efforts within the two-year period to acquire a replacement asset. This included actively seeking comparable investment opportunities that would allow you to apply your expertise in the development and operation of X. However, suitable vacant lots designated for X in XXXXXX are limited. You also explored alternative investment options, although one proposed opportunity did not proceed due to opposition from certain existing shareholders. Subsequently, on XX XXX 20XX, you entered into a share purchase agreement to acquire a X% interest in a new company for $X. | Detailed Reasoning - Application to your circumstances: Your genuine attempts to acquire a suitable replacement asset within the required timeframe and the circumstances that delayed completion, it is reasonable that the Commissioner would exercise the discretion under subsection 104-190(2) of the ITAA1997 to extend the replacement asset period.