Private ruling: CGT - Small business concessions, extension of time for rollover relief
Published: May 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 July 2011

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 124-75(3) of the Income Tax Assessment Act 1997 to allow further time for you to acquire a replacement asset? | A1: Yes, until 30 June 2014


Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 124-B | Income Tax Assessment Act 1997 section 124-75 | Income Tax Assessment Act 1997 subsection 124-75(1) | Income Tax Assessment Act 1997 subsection 124-75(2) | Income Tax Assessment Act 1997 paragraph 124-75(3)(b)

Reasons for decision: Summary: Subdivision 124-B of the Income Tax Assessment Act 1997 (ITAA 1997) explains the circumstances when a rollover is available for an asset that is compulsorily acquired, lost or destroyed. If you receive money as a result of the compulsory acquisition, you can only choose a rollover if you incur expenditure in acquiring another CGT asset. Under subsection 124-75(3), you must incur at least some of the expenditure no earlier than one year before the event happens or, within one year after the end of the income year in which the event happens. This period may be extended in special circumstances as outlined in the following example in Taxation Determination TD 2000/40 : Graeme had a commercial property compulsorily acquired by a State authority. Graeme is having a protracted legal dispute with the authority over the quantum of the compensation. On these facts, we would accept that there are special circumstances to allow further time. Having regards to your circumstances and the above principle, the Commissioner will allow an extension of time until 30 June 2014.

The State Department resumed the property in the relevant year. | No agreement or contract was entered into at the time of resumption, and no compensation was paid at that time. | There has been a protracted legal dispute over the compensation payable. | You received some compensation in the subsequent year. The final settlement sum is still the subject of the continuing legal dispute. | Currently the rollover provisions expire in the subsequent year.