Private ruling: Small business rollover concession on a capital gain
Date of advice: 30 June 2020
Published: August 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to XX/XX/20XX? | A1: Yes. The replacement asset period may be extended or modified by the Commissioner under subsections 104-197(5) and 104-190(2) of the ITAA 1997. Having regard to the particular circumstances of your case and the information provided, the Commissioner has applied the discretion and will extend the replacement asset period to XX/XX/20XX.

Relevant facts and circumstances: Entity A made a capital gain when an active asset was sold. Entity A utilised the small business active asset and small business rollover concessions for the sale of the business property. Entity A started to look for a replacement asset soon after the sale. Entity A has entered into an agreement with a third party that will result in the acquisition of a replacement asset. However, the acquisition is dependent on Council approval and construction of a commercial premises. There have been delays in this process but entity A is expected to acquire the replacement asset by XX/XX/20XX. The replacement asset will be used in a business carried on by either entity A, an affiliate of entity A, or an entity connected with entity A.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-E | Income Tax Assessment Act 1997 section 104-190 | Income Tax Assessment Act 1997 section 104-197