Private ruling: CGT - replacement asset period
Date of advice: 6 April 2023
Published: 5 June 2023
Ruling period: Year ending 30 June 20YY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Will the Commissioner exercise the discretion in subsection 104-190(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the replacement asset period to DD MM YYYY? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner will exercise the discretion and extend the replacement asset period to DD MM YYYY.

Relevant facts and circumstances: The Company sold farmland and made a capital gain. A farming business was carried out on the farmland by a related company. The capital gain was reduced by 50% under Subdivision 152-C of the ITAA 1997 and then the small business roll-over in Subdivision 152-E of the ITAA 1997 was chosen to defer the remaining capital gain. During the period from the sale of the original farmland to the acquisition date of the new farmland continuing efforts were made searching for a suitable replacement property. In MM YYYY real estate agents were engaged and instructed to source a replacement property. During the ensuing period various properties were inspected and a losing bid was made in a formal expression of interest on a property. Most of the 2-year replacement asset period was disrupted by the COVID-19 pandemic. A replacement asset was acquired by contract dated DD MM YYYY.

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