Private ruling: CGT - replacement asset rollover
Date of advice: 3 November 2021
Published: January 2022
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: XX XXX 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to XX XX 20XX in respect of the small business capital gains tax (CGT) replacement asset roll-over relief? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will exercise his discretion under subsection 104-190(2) of the ITAA 1997 and allow an extension of time until XX XX 20XX. Further information on the relevant factors of small business CGT Rollover generally can be found on our website ato.gov.au and entering Quick Code QC52291 into the search bar at the top right of the page. Note: We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the entity is entitled to the small business CGT concessions, the Commissioner has not considered whether the entity satisfies all the requirements of the small business CGT concessions. More information about the concessions can be found by searching Quick Code QC 22165 on ato.gov.au

Relevant facts and circumstances: You sold an active CGT small business asset on XX XX 20XX. The CGT event resulted in a capital gain to which you applied the roll over concession under small business roll-over, subdivision 152E of the ITAA 1997. The original rollover amount was $X. In XX 20XX, you acquired a replacement CGT asset - a rural farm for $X. You have actively attempted to conduct development and improvement on the replacement asset. The works was delayed due to COVID travel restrictions, supply chain disruptions and delays in regulatory application processing by relevant authorities. You are unlikely to compete improvement works planned for the property before the two-year anniversary of the original asset sale. You are in the process of completing the development and improvement. In 20XX financial year, you have spent $X on dam earthwork and $X on water solutions for the farm. You have stated you met the 'basic conditions' for CGT small business concession under section 152-10 of the ITAA 1997 and the improvement works will meet the requirement of replacement assets under Subdivision 152-E of the ITAA 1997.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 104-190(2)