Private ruling: CGT - replacement asset - extension of time
Date of advice: 5 June 2023
Published: 31 July 2023
Ruling period: Year ending 30 June 2022
Date scheme commenced: 1 July 2021

Ruling: Q1: Will the Commissioner exercise his discretion pursuant to subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the small business capital gains tax (CGT) replacement asset period? | A1: Yes. After taking into consideration your relevant circumstances, including the fact that Government-imposed restrictions in 2020 and 2021 in response to COVID-19 prevented you from using the Property in your business, the Commissioner will allow an extension of the replacement asset period. This private ruling has been limited to the question requested upon application, which is whether the Commissioner can exercise their discretion pursuant to subsection 104-190(2) of the ITAA 1997. Thus, the Commissioner has not considered whether the Property is, in fact, an active asset.

Relevant facts and circumstances: You operated a business consultancy enterprise through a company (Company 1). You sold your interest in Company 1 and made the choice to apply the small business roll-over under Subdivision 152-E of the ITAA 1997 to the residual capital gain. You acquired an asset that you planned to use in a business within the replacement period. You have experienced serious health issues requiring surgery and radiotherapy which impacted your ability to commence the new business. The restrictions related to the COVID-19 also heavily impacted on the commencement of your business.

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