Private ruling: Small business concessions - compulsory acquisition
Date of advice: 25 May 2020
Published: June 2020
Ruling period: Year ended 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise the discretion available under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to provide an extension of time for you to elect to use the replacement asset roll-over until 30 June XXXX due to the Property being compulsorily acquired? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will exercise the discretion to grant an extension of time to make a choice to utilise the roll-over under subdivision 124-B of the ITAA 1997. Further information on making a choice can be found by searching 'QC18383' on ato.gov.au

Relevant facts and circumstances: You and another entity acquired a building (the Property). The Property had a strong long term tenancy profile. The other entity received a Proposed acquisition notice (PAN) for the Property, notifying that the land (and thus the building) will be compulsorily acquired by a government department. On XXXX you and the other entity signed a contract for sale of the Property to a government department. Settlement occurred on the XXXX. Your share of proceeds was $AA,AAA,AAA. A year later you purchased the first replacement asset with part of the proceeds. Since then you have inspected a number of assets to find a suitable replacement asset. You would like an extension of time to acquire a replacement asset. You have found it difficult to purchase similar assets. The uncertainty COVID-19 has further reduced the supply of properties.

Relevant legislative provisions: Income Tax Assessment Act 1997 Paragraph 103-25(1)(b) | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 124-70 | Income Tax Assessment Act 1997 Section 124-75