Private ruling: Capital gains tax - extension of time
Published: April 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017
Date scheme commenced: 1 July 2013

Ruling: Q1: Will the Commissioner allow six months further time after the settlement date as further time provided in paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) for you to choose to apply the rollover concession in Subdivision 124-B of the ITAA 1997? | A1: Yes

Relevant facts and circumstances: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: • the application for private ruling • the documents provided with the application for private ruling. The entity has held land for over twenty years. Part of the land was compulsorily acquired by an authority. The remaining portion of the land continues to be held by the entity under a new certificate of title. The authority gave an initial offer and advanced the amount as compensation. The entity lodged a notice of claim with the authority to contest the quantum of compensation received. It is unknown how long the dispute is expected to take to come to a conclusion.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 124-B Income Tax Assessment Act 1997 Subsection 124-75(3)

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) of the ITAA 1997, 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 Income tax: capital gains: what are 'special circumstances' for the purposes of subsection 124-75(3) of the Income Tax Assessment Act 1997 ? (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. Your case is similar to the example provided in TD 2000/40 in that there is an ongoing legal dispute with the authority over the quantum of compensation you received. Taking your full circumstances and the above principles into account, the Commissioner will allow an extension to six months after the settlement date for the dispute.