Issue
Whether the Commissioner can extend the period of two years set out in subsection 123-75(1) of the Income Tax Assessment Act 1997 (ITAA 1997) within which a taxpayer must acquire a replacement asset to obtain small business roll-over.
Decision
No. The Commissioner has no discretion to extend the period of two years set out in subsection 123-75(1) of the ITAA 1997 within which the taxpayer must acquire a replacement asset to obtain small business roll-over.
Facts
The taxpayer sold the assets of the business in the 1998-1999 income year and received an amount for goodwill.
The taxpayer wants to roll over the capital gain from goodwill. However, more than 2 years have elapsed since the taxpayer entered into the contract to dispose of the business assets.
The taxpayer has requested an extension of time to acquire a replacement asset under the capital gains tax small business roll-over provisions as they applied at that time.
Reasons for Decision
Former Division 123 of the ITAA 1997 provides for a roll-over of a capital gain, and is applicable to assessments for the 1998-1999 income year.
A taxpayer who meets the conditions in section 123-10 of the ITAA 1997 can choose the roll-over. Under paragraph 123-10(f) of the ITAA 1997 the taxpayer can choose a roll-over where, not later than 2 years after the last trigger event during the roll-over year, the taxpayer chooses one or more CGT assets as replacements.
Under subsection 123-75(1) of the ITAA 1997 the taxpayer must acquire the replacement asset within the period starting one year before and ending two years after the happening of the last CGT event in the relevant income year.
The Commissioner does not have any discretion to grant an extension beyond the two year period specified in subsection 123-75(1) of the ITAA 1997.