EV 1052007942127currentnon-binding advice

CGT - small business concessions

Non-binding edited private advice. This is an edited version of private advice the ATO gave to a specific taxpayer about their own circumstances. You cannot rely on it — it is not binding and provides no protection for anyone else (see PS LA 2008/4). Use it as a guide to the ATO’s thinking, not as authority.

1

Will the Commissioner exercise the discretion under subsection 104-190(2)of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to apply the small business capital gains tax concessions, regarding a replacement asset roll-over?

2

Yes, after taking into consideration the severe business disruptions caused from the COVID-19 pandemic, making due diligence of prospective businesses difficult, and reducing the number of suitable businesses for sale, the Commissioner will exercise his discretion and extend the 2-year period to 20 December 20XX as per subsection 104-190(2) of the ITAA 1997 to apply the CGT small business concessions. This ruling applies for the following period Year ending 30 June 20XX The scheme commences on: XX August 20XX

3

A CGT happened on the XX August 20XX which resulted in a gain. The entity applied the small business 50% CGT discount and the small business 50% active asset reduction to the gain. The entity then chose to use the small business roll-over to the remainder of the gain allowing up until XX of August 20XX to purchase a new asset. Due to severe business disruptions from multiple state lockdowns and restrictions from the Covid-19 pandemic, made due diligence of prospective businesses difficult, and reduced number of businesses on the market resulting in a longer search period to find a suitable business to acquire. A new business was able to be purchased on the XX December 20XX.

4

Income Tax Assessment Act 1997 subsection 104-190(2)