Private ruling: Extension of time to replace an asset to maintain the small business CGT concession
Date of advice: 9 March 2021
Published: June 2021
Ruling period: Year ending DD MM YYYY
Date scheme commenced: DD MM YYYY

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? | A1: Yes. Having considered the relevant factors, and the circumstances of your case, the Commissioner will exercise his discretion to extend the replacement asset period?

Relevant facts and circumstances: You commenced a small business on a property you owned. You sold the property. On disposal of the property you made a net capital gain of $X to which you applied the small business rollover (after applying the 50% general discount and the small business active asset reduction). You intended to acquire a replacement asset within the 2 year timeframe to avoid triggering CGT event J5. Due to COVID-19 you experienced a delay in acquiring a replacement asset. The market had been severely affected and you were unable to travel due to border restrictions. You intend to acquire a replacement asset by DD MM YYYY.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 Subdivision 152-E | Income Tax Assessment Act 1997 Subsection 104-185(1) | Income Tax Assessment Act 1997 Subsection 104-190(2) | Income Tax Assessment Act 1997 Section 104-197 | Income Tax Assessment Act 1997 Section 104-198