Private ruling: Capital gains tax - extension of time to obtain a replacement asset
Date of advice: 8 April 2025
Published: 23 June 2025
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

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 and allow you to choose as a replacement asset an asset acquired more than one year before the disposal of the active asset being replaced? | A1: Yes. Having considered your circumstances and the relevant factors leading to the delay in disposing of the asset, the Commissioner considers it appropriate to grant an extension of the replacement asset period to allow you to choose the replacement asset that was purchased prior to the disposal of the active asset.

Relevant facts and circumstances: You owned a share of a property. You operated a primary production business in partnership with your spouse who also owned a share of the property. In the year ended 30 June 20XX you signed a contract to purchase a share of a replacement asset. You continued the primary production business at the new property. In the year ended 30 June 20XX you sold the original asset. Your net annual turnover is less than $2 million and your net asset value is less than $6 million. The period between the acquisition of the replacement asset and the disposal of the active asset exceeded the one-year prior replacement period by less than 2 months. The delay was outside your control.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 104-190(1A) | Income Tax Assessment Act 1997 subsection 104-190(2) | Income Tax Assessment Act 1997 section 152-10