Private ruling: CGT - small business concessions - rollover relief - extension of time
Date of advice: 31 May 2021
Published: August 2021
Ruling period: Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension to the replacement asset period to 30 June 20XX? | A1: Yes. The small business rollover allows you to defer the capital gain made from a Capital Gains Tax (CGT) event if you acquire one or more replacement assets and satisfy certain conditions. The conditions which must be met to obtain relief are set out in Subdivision 152-A of the ITAA 1997. For you to obtain a rollover, subsection 104-185(1) of the ITAA 1997 requires you to acquire a replacement asset within a period starting one year before, and ending two years after the date of disposal of the original asset. Subsection 104-190(2) of the ITAA 1997 states that the Commissioner may exercise his discretion to extend those time limits. After, reviewing the facts of your situation, the Commissioner will apply his discretion under subsection 104-190(2) of the ITAA 1997 and allow the extension of time.

Relevant facts and circumstances: You sold your business on XX October 20XX. You applied the CGT small business concessions, including the small business rollover to the capital gain made from the disposal of the business. You did not acquire a replacement asset within the two year replacement asset period as you could not find a suitable property in the required area You entered into a contract for a replacement asset on XX December 20XX, with settlement expected to occur June 20XX. After settlement you will commence a complete fit out which you expect to take XX months to be completed.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 subsection 104-185(1) | Income Tax Assessment Act 1997 subsection 104-190(2)