Private ruling: Small business concessions - rollover
Date of advice: 25 February 2019
Published: May 2019
Ruling period: Year ended 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to XX February 20XX? | A1: Yes. Having considered the relevant factors and the particular circumstances of your case, the Commissioner has applied his discretion and will extend the asset replacement period to XX February 20XX.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You sold your shares; in a Company in XXXX. The consideration was in cash plus two potential earn-out payments. The first relating XXXX Calendar year profit, and the second relating to XXXX Calendar year profit which you expected to receive in the XXXX. The earn-outs were conditional of continued employment. You made a capital gain. The Company was a small business entity. The Company satisfied the basic conditions for relief under Sub-division 152A. This had a capital gain of $XXXX You chose to rollover this gain under subdivision 152-E of the ITAA 1997. You were going to apply Subsection 104-190(1) of the Income Tax Assessment Act 1997 (ITAA 1997), whereby you can extend the replacement asset periods until 12 months after you received additional proceeds, and therefore had until 12 months after you expected to receive the final earn-out payment to acquire a replacement asset. However, you resigned from the Company and forfeited your right to the final earn-out. This meant you had until XXXX to find a replacement asset. You have made efforts to obtain a suitable replacement asset.

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