Private ruling: Small business CGT replacement asset rollover relief - extension of time
Date of advice: 7 December 2020
Published: January 2021
Ruling period: Year ending 30 June XXXX
Date scheme commenced: 1 July XXXX

Ruling: Q1: Will the Commissioner use his discretion to extend the replacement asset period pursuant to subsection 104-190(2) of the Income Tax Assessment Act 1997 in respect of the Small Business CGT replacement asset rollover relief? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner considers it appropriate to grant an extension of the replacement asset period.

Relevant facts and circumstances: You had a capital gains tax (CGT) event on XX XXX 20XX. The CGT event resulted in a capital gain of $X which was rolled over under the small business rollover. At the end of the two year period following the CGT event, there was $X of uncrystallised gain still remaining and you applied for a private ruling for an extension of time until 30 June XXXX. Since the previous ruling you have acquired additional active assets however further additional capital improvements that would qualify as replacement assets have been delayed due to a legal dispute. This has also been affected with delays in the court system process due to the onset of the COVID19 pandemic and the mediation is set to occur in the 20XX income year. As part of the mediation you plan to negotiate a purchase price for a capital asset and expect to extinguish the majority, or all, of the remaining capital gain from the original event. You have continued looking to purchase additional parcels of land locally to be used in a business however many haven't been viable due to a lack of suitable water sources and hence not pursued. Due to the above reasons and the expected acquisition of additional replacement assets occurring after the 20XX financial year, you are requesting a further extension of the replacement asset period to 30 June 20XX.

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