Private ruling: Income tax – Capital Gains Tax – Small Business concessions – Replacement asset
Date of advice: 1 March 2018
Published: June 2018
Ruling period: Year ending 30 June 2018 | Year ending 30 June 2019.
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 allow an extension to the replacement asset period to XX/XX/XXXX? | A1: Yes. For you to obtain a roll-over, subsection 104-197(1) of the ITAA 1997 requires you to acquire a replacement asset, and that it be an active asset of yours, within a period starting one year before, and ending two years after the date of disposal of the original asset. The replacement asset period may be extended or modified by the Commissioner. Having considered the relevant factors, and the particular circumstances of your case, the Commissioner is able to apply his discretion under subsection 104-190(2) of the ITAA 1997 to allow a reasonable extension to the time limit until XX/XX/XXXX. Allowing an extension is not prejudicial to the Commissioner in this case nor is it unfair to other people in similar positions.

Relevant facts and circumstances: The Trust sold a business in 201X. The Trust commenced a new business however after a short amount of time it appeared the business was not going to be profitable. The trustee was not prepared to invest further capital into this business. The sole director of the trustee company had two close relatives pass away. In December 201X the trustee began negotiations to purchase a business. Upon the drafting of a contract the seller withdrew from the sale. The trustee is actively looking for a new business to purchase.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 104-190(2) | Income Tax Assessment Act 1997 subsection 104-197(1) | Income Tax Assessment Act 1997 subsection 104-197(5) | Income Tax Assessment Act 1997 Subdivision 152-E