Private ruling: Income tax – capital gains tax – extension of time to acquire a replacement asset
Date of advice: 21 March 2019
Published: May 2019
Ruling period: Year ended 30 June 20XX to year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion pursuant to subsection 124-75(3) of the Income Tax Assessment Act 1997 to allow an extension of time to XX/XX/20XX to incur expenditure to acquire a replacement asset? | 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 17204' on ato.gov.au

Relevant facts and circumstances: You owned and rented out a property. The property was compulsory acquired by the Authority on XX/XX/20XX. You received a compensation amount of $ XX,XXX,XXX from the Authority which was paid on XX/XX/20XX. In XX/20XX you engaged lawyers and commenced legal action to recover the market value of the property and costs you were entitled to recover from the Authority. You pursued purchasing a replacement property and engaged real estate agents to source a suitable property. You purchased a replacement property for $XX,XXX,XXX on XX/XX/20XX. You purchased a second replacement property. The legal dispute with the Authority was settled on XX/XX/20XX and you received further compensation as a result of the compulsory acquisition. You are looking at purchasing another property to fully expend the compensation amount received.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 124-75(3)