Private ruling: CGT - small business concessions
Date of advice: 2 October 2025
Published: 17 November 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner grant an extension of time under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to acquire a replacement asset? | A1: Yes.

Relevant facts and circumstances: The Company operates many businesses. There were two directors of the Company who were spouses at the time. On September 20XX the Company sold its business('Business'). The Company applied the small business rollover to the capital gain. The Company also owns a second business ('Business B'). During the last X months one of the Directors experienced chronic health issues. This has impacted the Director's health, and they were unable to manage their affairs, make financial decisions and meet the asset replacement requirements. The Director was attending regular appointments to assist with their health and personal matters. The Director attended sessions with a specialist between July 20XX and October 20XX. The Director, on behalf of the Company, signed a lease for a business premises for Business B to operate from. The Company intends to purchase various equipment required for Business B to operate as the replacement asset.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-E | Income Tax Assessment Act 1997 subsection 104-190(2) | Income Tax Assessment Act 1997 section 104-185

Reasons for decision: Summary: Section 152-410 of the ITAA 1997 states that a rollover can be obtained under this section for a capital gain if the basic conditions in Subdivision 152-A of the ITAA 1997 are satisfied. A roll-over can be chosen even if the replacement asset has not been purchased or you have not yet incurred fourth element expenditure as per 104-185(1)(a). The replacement asset period as outlined in subsection 104-190(1A) of the ITAA 1997 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 under subsection 104-190(2) of the ITAA 1997. However, a replacement asset does not have to be the same category of asset, or serve the same function, as the original asset and it can also include depreciating assets. This is because if such a replacement asset ceases to be an active asset, then the effect of CGT event J2 is to reinstate the original rolled over capital gain. If the replacement asset is a depreciating asset, it will also be subject to the capital allowance provisions. | Detailed Reasoning - Factors Commissioner considers whether to allow a longer period:: In determining whether to allow a longer period, the Commission will consider a range of factors such as: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to provide such an extension • whether there is any prejudice to the Commissioner if the additional time is allowed • whether there is any unsettling of people, other than the Commissioner, or of established practices • the need to ensure fairness to people in like positions and the wider public interest • whether there is any mischief involved • the consequences of the decision | Detailed Reasoning - Application to your circumstances: The Director of the Company was experiencing chronic health issues which impacted their ability to acquire a suitable replacement asset. The Director was seeking medical treatment from July 20XX and October 20XX which was during the replacement asset period of X years which expired on the September 20XX. Having considered the circumstances, the Commissioner will grant an extension of time under subsection 104-190(2) of ITAA 1997 to acquire a replacement asset until September 20XX.