Private ruling: Extension of time to replace a compulsorily acquired asset
Date of advice: 10 May 2023
Published: 26 June 2023
Ruling period: Financial year ending 30 June 20XX | Financial year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion available under paragraph 124-75(3)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to provide an extension of time for the Company to acquire a replacement asset? | A1: Yes. We accept that special circumstances have delayed the Company's attempts to acquire a replacement asset and will provide the extension of time.

Relevant facts and circumstances: The Company owned the Property that was compulsorily acquired by an Australian government agency for an agreed market value. The Company is currently seeking additional compensation. The Company has actively sought to acquire a replacement property. The Company has encountered significant difficulty locating and purchasing an equivalent property within the replacement asset period. The Company representatives have attended a number of auctions, with those properties selling well in excess of the advertised price. An equivalent property has not yet been identified from the market research undertaken, those of similar market value are vacant possession and do not offer a commensurate yield/rate of return to the compulsorily acquired property. Upon finalising the claim for additional compensation, the Company should have additional funds to acquire a suitable replacement property.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 124-70(1) | Income Tax Assessment Act 1997 subsection 124-75(3)