Private ruling: CGT - small business concessions - extension of time
Date of advice: 9 April 2024
Published: 20 May 2024
Ruling period: Year ending 30 June 2024 | Year ending 30 June 2025
Date scheme commenced: 1 June 2022

Ruling: Q1: Will the Commissioner exercise the discretion in subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to 30 September 2025? | A1: Yes, having considered your circumstances and the relevant factors, the Commissioner will use the available discretion to grant you further time to acquire a replacement asset. The trust has acquired a replacement asset within the required two-year period but cannot use it for business purposes as it is in the process of being built to suite the trust's needs. This is an acceptable explanation for the period of extension requested.

Relevant facts and circumstances: The trust operated a business which was sold in June 2022. The trust made the choice to use the small business rollover relief. The trust has used the funds from the sale to acquire a new block of land in August 2023 which has an existing commercial property and some vacant land. The existing commercial property is currently tenanted, and the trust is receiving lease income. The remaining vacant land is to be utilised to build a new business premise and lease to a related operating entity. The trust has contacted a surveyor who did a floor plan for the property. The trust has been in discussions with a builder but has not yet engaged them to complete the works. The trust has been corresponding with council about the required changes to the property. Due to current delays in the building market the estimated timeframe for the build to be available to be occupied is 18 months from the current date. The property is located in a small country town with limited resources which has contributed to delays.

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