Private ruling: Commissioner's discretion - replacement asset period
Date of advice: 7 April 2026
Published: 22 June 2026

Ruling: Q1: Will the Commissioner allow the taxpayer an extension of time under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to acquire a replacement asset until 31 March 2027? | A1: Yes. This ruling applies for the following periods : Year ending 30 June 20XX Year ending 30 June 20XX The scheme commenced/s on DD MM 20XX Relevant facts and circumstances You held equity interest via ordinary shares in 2 companies. You undertook postgraduate studies to qualify as a specialist in your industry. You disposed your shares on DD MM 20XX to fund the establishment or purchase of a specialist practice. You realised that establishing a new specialist practice from inception was not a viable option. You started negotiations with a potential vendor, but unfortunately, the transaction did not proceed. You entered discussions with another owner of a business to purchase one of their existing practices. You are experiencing a delay due to several unavoidable commercial and operational complexities. This includes the negotiation of a new long-term commercial lease, the requirement to complete existing patient treatment plans, and the reorganisation of staff, many of whom have been with the practice for over a decade. You have provided a letter from the current vendor confirming their interest in selling the branch to you, but they are requiring further time to be able to consult with the individual partners, practice accountants, and seek legal advice. Further to this, the practice needs to complete longstanding and complex work for their patients, negotiate for a new lease with the landlord, and reorganize their auxiliary staffing.


Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 104-190(1A) | Income Tax Assessment Act 1997 subsection 104-190(2) | Income Tax Assessment Act 1997 Subdivision 152-E

Reasons for decision: Summary: The Commissioner has considered the circumstances surrounding the delays in replacing the asset, and it is reasonable to allow an extend the time limit to DD MM 20XX. Granting this extension is fair and equitable given the circumstances. The decision to approve the extension aligns with fairness for those in similar positions and with the broader public interest. There does not appear to be any mischief involved, and no adverse consequences are expected from granting the extension. | Detailed Reasoning - Detailed reasoning: Subsection 104-190(1A) of the ITAA 1997 states: 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) Staring one year before the last CT 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) 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. Subsection 104-190(2) of the ITAA 1997 states: The Commissioner may extend the replacement asset period, or that period as modified by subsection (1). In determining whether to allow an extension of time, Commissioner considers the following factors: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to provide such an extension • whether there is any prejudice to the Commissioner if the additional time is allowed (however, the mere absence of prejudice is not enough to justify the granting of an extension) • whether there is any unsettling of people, other than the Commissioner, or of established practices • the need to ensure fairness to people in like positions and the wider public interest • whether there is mischief involved, and • the consequences of the decision. | Detailed Reasoning - Application to your circumstances: As a specialist practitioner, you sold your equity in your existing companies and are now looking to establish or purchase a specialist practice. However, you have realised it was not viable to set up a new practice and are therefore organising a buyout of an existing practice. You entered into negotiations with a vendor, but the transaction did not proceed. You are now in negotiations with the owners of another practice, but are facing some unavoidable commercial and operational delays. These include negotiating a new long-term commercial lease, meeting existing patient treatment plan requirements and reorganising staff. Consequently, you are requesting the Commissioner's discretion to extend the 2-year replacement asset period. After considering these circumstances, the Commissioner considers that you have provided an acceptable explanation for the delay you are experiencing in replacing the asset. There appears to be no mischief involved, and there will be no prejudice to the Commissioner in allowing an extension of the replacement asset period. Therefore, the Commissioner has decided to exercise their discretion under subsection 104-190(2) of the ITAA 1997 and extend the replacement asset period until DD MM 20XX. This ruling has not considered your eligibility for the CGT small business concessions. You should ensure that you satisfy the relevant conditions to apply the concessions