Private ruling: CGT - replacement asset
Date of advice: 14 November 2022
Published: 16 January 2023
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the acquisition of residential property satisfy the same or similar purpose test under subsection 124-75(4) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Acquiring the residential property will satisfy the same or similar purpose test under subsection 124-75(4) of the ITAA 1997. For more information on involuntary disposal of a CGT asset, please go to www.ato.gov.au and search for QC 66017.

Relevant facts and circumstances: You owned several lots. The lots were commercial rentals. The lots were post-CGT assets. You operate a business, and these lots were owned for the purpose of carrying on your business. A government authority compulsorily acquired the whole property. The government authority completed the acquisition of the property in mid-20XX. You intend to acquire replacement rental properties with the compensation you received. You have decided to acquire residential rental properties with the remaining compensation from the acquisition. You intend to acquire the new properties before mid-20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 124-75(4 )