Private ruling: CGT - replacement asset period
Date of advice: 15 May 2026
Published: 10 August 2026
Ruling period: DD MM YYYY to DD MM YYYY
Date scheme commenced: Year ended 30 June 20YY

Ruling: Q1: Will the Commissioner, in accordance with subsection 104-190(2) of the Income Tax Assessment Act 1997, exercise his discretion to extend the time limit set out in subsection 104-10(1A) for The Taxpayer to acquire a replacement asset until 30 June 20XX for the purposes of the small business roll-over under Subdivision 152-E? | A1: Yes.

Relevant facts and circumstances: 1. The Taxpayer is an Australian resident taxpayer. 2. The Taxpayer was previously married to their spouse however they are now divorced. 3. Following their separation the Taxpayer and their ex-spouse sold a jointly owned CGT Asset, with settlement occurring on DDMMYYYY. 4. The sale of the CGT Asset resulted in a CGT event occurring which was recorded in the income tax return for the income year ending 30 June 20YY and the CGT Small business roll-over concession contained in Subdivision 152-E of the Income Tax Assessment Act 1997 was applied. 5. The Taxpayer and their ex-spouse are currently in the process of finalising their financial settlement in Court for the division of their assets. 6. Since the sale of the CGT Asset the Taxpayer has searched for a replacement asset however, as the result of the financial settlement is unknown they have been unable to commit to purchase due to their unknown financial position. 7. When the financial settlement is finalised and the Taxpayer has a determined financial position, they intend to purchase a replacement asset. 8. The Taxpayer has requested that the Commissioner extend the replacement asset period in accordance with subsection 104-190(2) so that they can purchase the replacement asset from an informed financial position.

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

Reasons for decision: Detailed Reasoning - Issue 1: All legislative references are references to the Income Tax Assessment Act 1997 unless otherwise stated. | Summary: The Commissioner will exercise the discretion contained in subsection 104-190(2) to extend the time limit for the Taxpayer to acquire a replacement asset until 30 June 20XX. | Detailed Reasoning - Detailed reasoning: The small business roll-over contained in Subdivision 152-E allows a taxpayer to defer the making of a capital gain from a CGT event happening in relation to one or more small business assets. A taxpayer can choose the roll-over where the basic conditions contained in Subdivision 152-A are met and there are roll-over conditions that must be satisfied by the end of the replacement asset period. The roll-over replacement asset period is set out in section 104-190 which states: 104-190(1A) If you choose a small business roll-over under Subdivision 152-E for a *CGT event that happens in relation to a *CGT asset in an income year, the replacement asset period is the period: (a) starting one year before the last CGT event in the income year for which you obtain the roll-over; and (b) ending at the later of: (i) 2 years after that last CGT event; and (ii) if the first-mentioned CGT event happened because you *disposed of the CGT asset - 6 months after the latest time a possible *financial benefit becomes or could become due under a *look-through earnout right relating to the CGT asset and the disposal. 104-190(1) The replacement asset period is modified if your *capital proceeds for the *CGT event are increased under subsection 116-45(2) or 116-60(3) after the end of that period. Instead, you have until 12 months after you receive those additional proceeds to *acquire a replacement asset, or incur *fourth element expenditure in relation to a *CGT asset, or do both. Subsection 104-190(2) provides the Commissioner with a general discretion to extend the time limit in which a relevant replacement asset can be acquired. Subsection 104-190(2) states: 104-190(2) The Commissioner may extend the replacement asset period, or that period as modified by subsection (1). ATO Interpretative Decision ATO ID 2001/619 Income Tax Capital gains tax: Small business roll-over: extension of time to acquire replacement asset (ATO ID 2001/619) outlined the circumstances in which a statutory time period would be discretionarily extended by the Commissioner. While ATO ID 2001/619 was withdrawn on the basis that it was considered to a simple restatement of the law, the reasons relied on in the decision can provide useful guidance in applying the subsection 104-190(2) discretion. ATO ID 2001/6198 stated: In determining if the discretion would be exercised the Commissioner has considered the following factors: • there should be evidence of an acceptable explanation for the period of extension requested and that it would be fair and equitable in the circumstances to provide such an extension; • account must be had to any prejudice to the Commissioner which may result from the additional time being allowed, however the mere absence of prejudice is not enough to justify the granting of an extension; • account must be had of any unsettling of people, other than the Commissioner, or of established practices; • there must be a consideration of fairness to people in like positions and the wider public interest; • whether there is any mischief involved; and • a consideration of the consequences. | Detailed Reasoning - Application to taxpayer's circumstances: The Taxpayer and their ex-spousesold the CGT Asset with settlement occurring onDDMMYYYY. TheTaxpayer and their ex-spouse have divorced but their financial settlement has not been finalised and is currently being determined through legal proceedings. The Taxpayer has searched for a replacement asset and intends to purchase a replacement asset, however without the finalised financial settlement the Taxpayer is unsure of their financial position and has been unable to commit to a purchase and is unlikely to be able to commit to a purchase prior to the statutory end date of the replacement asset period. The Commissioner considers that these circumstances consist of an acceptable explanation for an extension of the end date of the replacement asset period and that it would be fair and equitable in the circumstances to do so. Further, by granting an extension of time to the Taxpayer to acquire a replacement asset there is no prejudice to the Commissioner nor unsettling of people or established practices. Fairness to people in like positions and the wider public interest has been considered. The Commissioner will exercise the discretion contained in subsection 104-190(2) to extend the time limit for the Taxpayer to acquire a replacement asset until 30 June 20XX.