Private ruling: An extension of time to purchase a replacement asset
Date of advice: 15 April 2021
Published: June 2021
Ruling period: Year ended DD MM YYYY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Will the Commissioner exercise his discretion under section 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to DD MM YYYY? | A1: Yes.Having considered the relevant facts, the Commissioner will apply his discretion under subsection 104-190(2) of the ITAA 1997 and allow an extension of the time to DD MM YYYY for the asset to purchase a replacement asset.

Relevant facts and circumstances: You sold Farm A, Water Access Licence #1, #2 and #3. You made a capital gain and have elected to apply the Small Business Rollover Concession. You attempted to purchase Farm B (a replacement asset) through private sale however was unsuccessful. You attempted to purchase Farm C (a replacement asset) at a public auction and although you were the highest bidder you did not meet the reserve and negotiation was unsuccessful. You experienced a severe drought which affected the conditions of Farm A, minimized the market for acquisition and the lending conditions of financial institutions, specifically the loan value ratio decreased from 65% to 45%. COVID-19 imposed travel restrictions which prevented you from travelling and conducting your due diligence when purchasing a replacement asset. You have resumed negotiations for Farm B (a replacement asset). You have identified Farm C (a potential replacement asset) and will attend a public auction for Farm C on DD MM YYYY.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-190