Private ruling: CGT - small business relief
Date of advice: 7 May 2026
Published: 20 July 2026
Ruling period: Year Ending 30 June 20XX
Date scheme commenced: July 20XX

Ruling: Q1: Will the Commissioner allow an extension of time under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) until MM 20XX to establish a replacement active asset so the small business capital gains tax (CGT) replacement rollover relief (Small business rollover) can be applied after the sale of the Property? | A1: Yes.

Relevant facts and circumstances: You owned the Property. You operated the Business out of the Property. Due to the dissolution of your marriage, you unwillingly sold the Property. You are still operating the Business out of the Property; however, you are now renting the Property from the new owner, who is not associated with you. You intend on purchasing a new property. You intend on purchasing this property as soon as practicable. You intend to operate the Business out of this property after purchase. You contacted commercial real estate agents, expressing interest in purchasing a new property, if anything was to become available. In addition, on a regular basis, you researched available properties. However, often, there was only a few. There were particularly only a few which satisfied your budget and desired location. Often, any which did satisfy these necessities were promptly sold to other purchasers. You queried a real estate agent about a property. You also set up an online alert for any properties which were available. You have seriously considered the purchase of several new properties. Despite this, you did not end up purchasing these properties as the contracts did not proceed. You also considered the purchase of a property further away from your desired location at some point. You did not end up purchasing a property of such as you deemed this to have posed a negative impact to the Business. You also considered the purchase of properties which did not directly suit your necessities; however, you could potentially modify. Despite this, there was even fewer available properties which fell within this scope. You discovered properties where you were to have a new building built. Despite this, for one property, you encountered issues with the builders, who were wanting to charge a higher amount to build the building than you anticipated. For the other property, you entered a contract to purchase this property. Despite this, you discovered you were unable to build the tenancies you necessitated. There were also council issues. You also came to a realisation as to the financial unviability of building the new building. As a result, you did not proceed with the contract. Currently, you are considering the purchase of a commercial tenancy at X, where a developer is building the site. You are waiting for further information, such as pricing, before you will decide as to whether you will purchase this asset.

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

Reasons for decision: Summary: The Commissioner will exercise their discretion to extend the replacement active asset period pursuant to subsection 104-190(2) of the ITAA 1997 to MM 20XX in respect of the small business CGT replacement active asset rollover relief. It is acknowledged: • the process for establishing a replacement active asset began within the replacement active asset period, • a replacement active asset will be established after the replacement active asset period, • the delay in establishing a replacement active asset was beyond your control, and • the Commissioner considers the circumstances an acceptable reason to extend the replacement active asset period. | Detailed Reasoning - Detailed reasoning: If you chose the Small business rollover under Subdivision 152-E of the ITAA 1997, for a CGT event that happens in relation to a CGT active asset in an income year, the replacement active asset period, as defined under subparagraph 104-190(1A)(b)(i) of the ITAA 1997, ends 2 years after the last CGT event in the income year for which you obtain the rollover. As per subsection 104-190(2) of the ITAA 1997, the replacement active asset period can also be extended at the Commissioner's discretion. The relevant factors in determining whether to extend the replacement active asset period are: • whether there is evidence of an acceptable explanation for the period of extension requested and that it would be fair and equitable in the circumstances to provide such an extension, • whether there is any prejudice to the Commissioner which may result from the additional time being 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 interests, • whether there is any mischief involved, and • the consideration of the consequences. | Detailed Reasoning - Application to your circumstances: You are yet to establish a replacement active asset and it has been more than 2 years since you have disposed the original active asset. You have demonstrated a commitment in establishing eligible rollover active asset/s. It is noted that extenuating circumstances existed, including the discontinuation of your marriage. The Commissioner will grant an extension of time in this case because: • there is an acceptable explanation as to why the delay occurred, • it would not be unfair and unequitable to entities in similar circumstances or like position to yourself, • you had minimal control over the circumstances which arose around the replacement active asset period, and • you had demonstrated a commitment to purchasing a new asset.