Private ruling: CGT - replacement asset
Date of advice: 15 September 2023
Published: 24 October 2023
Ruling period: Year ending 30 June 2023 | Year ending 30 June 2024
Date scheme commenced: 1 July 2022

Ruling: Q1: Will the Commissioner exercise the discretion under paragraph 124-75(3)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time, until 30 June 2024, for you to acquire replacement assets? | A1: Yes. You have provided an adequate explanation of the delays in acquiring a replacement asset since you received your final compensation payment. The Commissioner will allow the extension of time for you to acquire an additional replacement asset.

Relevant facts and circumstances: Prior to 20 September 1985, you acquired a commercial rental property (the original property). Approximately XX years ago the asset was compulsorily acquired by the roads authority of the state. You applied the CGT compulsory acquisition rollover allowing you to acquire replacement asset that have pre-CGT status, subject to their acquisition cost not exceeding 120% of the market value of the original asset on the day it was compulsorily acquired. You received multiple amounts of compensation for the original property with the final amount being received just over XX years ago. You have purchased two replacement asset and have requested an extension of time to acquire an additional replacement asset. You have provided information and evidence to support the request for the extension of time to explain the delays in acquiring the assets. These have included: • Delays in receiving compensation. • Lockdowns and restrictions due to COVID-19. • Difficulties acquiring finance. • Very high demand for suitable replacement properties. You have outlined the steps you have taken to mitigate and overcome the above impediments to acquiring the replacement assets.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 124-B | Income Tax Assessment Act 1997 Section 124-70 | Income Tax Assessment Act 1997 Section 124-75