Private ruling: An extension of time
Date of advice: 19 September 2019
Published: November 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

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 an extension of time to 30 June 20XX to acquire a replacement asset? | A1: Yes. Having considered the company's circumstances 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: The Company (AB) is an Australian company which owns non-residential land and property. In 20XX, AB received notice from ABC advising that their interest in the landholdings was to be compulsorily acquired. In 20XX, an acquisition notice was published in the Government Gazette to effect the compulsory acquisition of the landholdings. In 20XX, AB lodged a Claim for Compensation for the amount of $XXX. In 20XX, a Deed for Advance Payment was entered into by ABC and AB. ABC will pay Advance Money to AB as part compensation for the compulsory land acquisition. In 20XX, the ABC wrote to AB and offered them $XX in compensation for the compulsorily acquired landholdings. The ABC also enclosed a compensation notice, a valuer determination, acquisition notice published in the Government Gazette, and a deed of release and indemnity. AB is not satisfied with the offer and is currently in negotiations with ABC in order to reach an agreement for the price of the landholdings. AB appealed to the Land and Environment Court and this court process remains unresolved. AB also intends to purchase property to replace the compulsorily acquired landholdings and will be used in a similar manner to the previously owned property. As such, the replacement asset will be used for the same purpose as the original asset. AB will only be able to acquire the replacement asset once the compensation negotiation concludes and it has clarity on the ultimate compensation amount it will receive. Thus, AB has requested an extension of time until 20XX to enable them to locate and acquire an acceptable replacement asset.

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