Private ruling: Small Business Concession - replacement asset rollover - extension of time
Date of advice: 8 August 2018
Published: September 2018
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner allow an extension of time under subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) for you to acquire a replacement asset? | A1: Yes Further issues for you to consider This ruling is limited to a consideration of extending the replacement asset period. Information about eligibility for the small business CGT concessions can be found on our website www.ato.gov.au and entering Quick Code QC52266 into the search bar at the top right of the page.


Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 104-190(2)

Reasons for decision: Summary: In determining whether the discretion to allow further time would be exercised, the Commissioner has considered the following factors: ● evidence of an acceptable explanation for the period of the extension requested (and whether it would be fair and equitable in the circumstances to provide such an extension) ● prejudice to the Commissioner which may result from the additional time being allowed (but the mere absence of prejudice is not enough to justify the granting of an extension) ● unsettling of people, other than the Commissioner, or of established practices ● fairness to people in like positions and the wider public interest ● whether any mischief is involved, and ● consequences of the decision. In this case, we consider that there is an acceptable explanation for the delay in acquiring the replacement property. We consider that continuing efforts were made to acquire a replacement property. You were unable to find a replacement asset within the timeframe due to your remote location and subsequent lack of suitable properties being available, along with potential property purchases falling through. We consider that allowing this request would not cause the unsettling of others who are in a similar situation. We do not consider that there is any mischief involved. Accordingly, the Commissioner will exercise his discretion under subsection 104-90(2) of the ITAA 1997 to extend the time period .

Relevant Facts: You sold a property in 2013. | You applied the small business roll-over to the capital gain made on the sale of the active asset (after applying the small business active asset reduction). | Immediately after the sale of your property you contacted local real estate agents to review properties available for sale within the area; however the real estate agent’s advised that because of the geographical location there were no properties for sale at that time that you could purchase. | After a period of time, you approached a neighbouring property owner and subsequently established a consortium to propose to the receivers of ‘’A’’ who owned numerous farming properties to buy back some properties. It was understood that each member of the consortium would buy a property each, however, after a period of time and careful planning the receivers rejected the proposal. | After a further period of time you approached a neighbour who was interested in selling their property, however this fell through due to the neighbour experiencing extreme personal circumstances and the neighbour was not in an emotional state to discuss the sale of the farm. | In 2016 you located another property which you intended to purchase, however due to your financial position you were unable to obtain finance to purchase the property. | You found a replacement asset which was acquired in 2018.