Private ruling: Small business roll-over
Date of advice: 22 May 2026
Published: 10 August 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: DD MM 20XX

Ruling: Q1: Will the Commissioner exercise their discretion under subsection 104-109(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to DD MM 20XX? | A1: Yes.

Relevant facts and circumstances: You are the trustee for Trust A. You sold your shares in Company A on DD MM 2023. You deferred the capital gain from this sale using the small business roll-over. You identified a suitable replacement asset, being units in Trust B. At the time, you owned some units in Trust B. Trust B owns commercial premises in which you operate your business. You entered into a verbal agreement with the vendor to purchase the units in Trust B. You engaged a mortgage broker and lawyers to arrange the finance and prepare the contract. The contract was subsequently signed on DD MM 20XX, being within the replacement asset period. You later identified that the vendor had been incorrectly listed as the superannuation fund entity instead of the individual. A new contract was executed with the correct vendor details on DD MM 20XX, being outside of the replacement asset period.

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

Reasons for decision: Summary: The Commissioner has considered the circumstances surrounding the reasons for the delay and finds it reasonable to allow an extension of the time limit to DD MM 20XX. Allowing this extension is fair and equitable in the circumstances. The decision to grant the extension is consistent with fairness to those in similar positions and with the broader public interest. There does not appear to be any mischief involved, and no adverse consequences are expected to result from granting the extension. | Detailed Reasoning - Detailed reasoning: Subsection 104-190(1A) states that if you choose a small business roll-over under subdivision 152-E of the ITAA 1997 for a CGT event that happens in relation to a CGT asset in an income year, the replacement asset period is the period: a) Staring one year before the last CGT event in the income year for which you obtain the roll-over; and b) Ending at the later of: i) 2 years after that last CGT event; and ii) The first-mentioned CGT event happened because you disposed of the CGT asset 6 months after the latest time a possible financial benefit becomes or could become due under a look-through earnout right relating to the CGT asset and the disposal. Subsection 104-190(2) of the ITAA 1997 states that the Commissioner may extend the replacement asset period. In determining whether to allow an extension of time, the Commissioner considers the following factors: • 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 (however, the mere absence of prejudice is not enough to justify the granting of an extension) • 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 mischief involved, and • the consequences of the decision. | Detailed Reasoning - Application to your circumstance: You disposed of your original asset on DD MM 20XX and elected to apply the small business roll-over to the capital gain. This means that the replacement asset period started on DD MM 20XX and ended on DD MM 20XX. You identified a suitable replacement asset and were working toward acquiring the asset by DD MM 20XX. The negotiations for the acquisition were complex as both you and the vendor required to obtain legal and financial advice to facilitate the transaction before the contract was able to be signed. The contract for the purchase was signed on DD MM 20XX, however, you later discovered that the contract incorrectly listed the vendor entity. As a result, the vendor entity needed to be corrected, and a new contract was executed on DD MM 20XX. The replacement asset was acquired only XX days after the end of the replacement asset period. After considering these circumstances, the Commissioner is satisfied that you have provided an acceptable explanation for the delay in completing the replacement asset acquisition. The delay in meeting the deadline was due to delays in the contract negotiations and a contract error outside of your control. The extension requested is only for a short period outside of the 2-year period. There appears to be no mischief involved, and there will be no prejudice to the Commissioner in allowing an extension of time. Therefore, the Commissioner has decided to exercise their discretion under subsection 104-190(2) of the ITAA 1997 to extend the replacement asset period until DD MM 20XX.