Private ruling: Extension of time small business rollover
Date of advice: 10 September 2025
Published: 17 November 2025
Ruling period: Year ended 30 June 2024
Date scheme commenced: 1 July 2023

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

Relevant facts and circumstances: You conducts a farming business. You disposed of farmland. A contract of sale was executed on XX February 20XX. You elected the capital gains tax (CGT) small business rollover in relation to the capital made from the sale of the farmland. There was a capital gain. You found a suitable replacement asset and had intentions to settle by XX February 20XX. The purchase negotiations for the replacement asset were finalised in January 20XX. The date set to sign contracts was XX February 20XX. During the conveyancing period Individual A contacted the local council on various occasions to provide approval documents including the certification of the septic system. You were advised by their lawyers not to sign the contract of sale without receiving and viewing the septic report from the local council. The local council provided the septic report via post which was received on XX March 20XX. You signed the contract of sale to purchase the farmland on XX March 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-E | Income Tax Assessment Act 1997 section 152-410 | Income Tax Assessment Act 1997 section 104-190

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. The replacement asset period as outline 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. | 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: All attempts were made to acquire the replacement asset before XX February 20XX, 2 years after the original CGT Event, disposal of active asset of farmland. You did so by finding a suitable property and finalising the purchase negotiations in January 20XX. Once the conveyancing work was completed for this stage of acquiring the replacement asset, the date set to sign the contract was XX February 20XX. You then continued to follow up on multiple occasions with the local council to provide documents including the certification of the septic system by XX February 20XX. You were advised by your lawyers not to proceed further with the purchase of the replacement asset without reviewing reports by the council including the septic report. You contacted the local council on numerous occasions to follow up the progress of the reports however the report was not received until XX March 2024. This was X days past the 2-year period from when the original CGT Event occurred. The Commissioner accepts that circumstances were outside the control of Individual A and prevented the purchase of the replacement asset within the relevant 2-year period. Therefore, the Commissioner will allow further time until XX March 20XX to acquire a replacement asset.