Private ruling: CGT - Compulsory acquisition rollover relief
Date of advice: 18 June 2019
Published: August 2019
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 124-75(3) of the Income Tax Assessment Act 1997 (ITAA 1997) extend the time required to obtain a replacement asset for a compulsorily acquired asset? | A1: Yes. Having considered your circumstances and the relevant factors, it is accepted that your circumstances meet the special circumstances outlined in Taxation Determination TD 2000/40. The Commissioner considers it appropriate to grant an extension of the replacement asset period. | Q2: Is the replacement-asset roll-over provided in subdivision 124-B of the ITAA 1997 available? | A2: Yes. You meet the relevant conditions contained in section 124-70 and 75 of the ITAA 1997. Accordingly, the replacement asset roll-over provided in subdivision 124-B of the ITAA 1997 is available to be applied.

Relevant facts and circumstances: You purchased an investment property as tenants in common, which was used to generate income. In February 20XX you entered into heads of agreement to sell the property to an unrelated purchaser. This sale did not proceed after consideration of the potential impact of the property being subject to a compulsory acquisition in the future. The property was compulsorily acquired via a Notice of Acquisition issued on the April 20XX. You entered into negotiations for further compensation for the sale price. These negotiations were prolonged and were not finalised until a Deed of Release was signed. You settled on the compensation amount. You purchased a replacement property after finalising the compensation claim. This property is used to generate income.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 124-B | Income Tax Assessment Act 1997 Subsection 124-75(3)