Private ruling: CGT - small business concession
Date of advice: 30 June 2022
Published: October 2022
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the 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 to the 20XX/XX financial year? | A1: Yes. Having considered the relevant factors and your specific circumstances the Commissioner will exercise the discretion pursuant to subsection 104-190(02) of the ITAA 1997 and extend the replacement asset period to the 20XX/XX financial year.

Relevant facts and circumstances: You acquired an agreement with a franchise whereby you derive income for assisting other franchisees. You owned and sold the agreement which resulted in a capital gain. At the time of the sale, you chose to apply the small business roll-over under Subdivision 152-E of the ITAA 1997 which allows you to defer the making of a capital gain from a CGT event happening in relation to one or more small business assets if the basic conditions in Subdivision 152-A are satisfied for the gain. You determined that you satisfied the base conditions for relief in Subdivision 152-A specifically referring to section 152-10 of the ITAA 1997. You determined the agreement was an active asset under section 152-40 of the ITAA 1997. Within the two-year period you attempted to acquire other rights as replacement asset but was unsuccessful due to: • COVID-19 interstate travel restrictions which prevented you from conducting inspection. • The economic impact of COVID-19 limited the acquisition market. • Natural disaster - flooding • An unexpected change in shareholders. You have recently identified another possible replacement asset and are currently undertaking the required actions to secure the replacement asset.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 152 | Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 Subdivision 152-E | Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-40