Private ruling: Capital gains tax (CGT) and the small business concessions
Date of advice: 3 December 2018
Published: March 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner extend the replacement asset period? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner considers it appropriate to grant an extension of the replacement asset period. Further information can be found by searching 'QC 52291' on ato.gov.au

Relevant facts and circumstances: You entered into a contract to sell shares. The contract contained terms for an Earn Out Arrangement (the Arrangement) to be entered into by the parties. The Arrangement was for payments to be made in less than 5 financial years if certain conditions were met. You applied the small business rollover contained in Subdivision 152-E of the Income Tax Assessment Act 1997 to disregard the remaining net capital gain made on the sale of the shares, after applying the general 50% discount and the small business active asset reduction. You received payments according to the Arrangement in several financial years. In 20XX you received a notice outlining the performance of the business. You will not receive a further payment under the Earn Out arrangement and you will not receive a Final Earn Out Amount. The latest possible time that a payment could have been received under the Arrangement was 20XX. You had an expectation, based on prior years’ performance that further payments under the Arrangement would be made.

Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 152-E | Income Tax Assessment Act 1997 section 104-190