Will the Commissioner exercise his discretion and extend the time for obtaining a replacement asset?
Yes. To meet the requirements of paragraph 124-75(3)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) the new asset must be acquired on or before 30 June 2021 or within such time as the Commissioner allows in special circumstances. You are seeking an extension. When considering what factors are taken into consideration when allowing an extension of time to purchase a replacement asset the Commissioner considers the following factors: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to provide such an extension • whether there is any prejudice to the Commissioner if the additional time is allowed, however the mere absence of prejudice is not enough to justify the granting of an extension • whether there is any unsettling of people, other than the Commissioner, or of established practices • fairness to people in like positions and the wider public interest • whether there is any mischief involved and • the consequences of the decision.
In considering all of your circumstances, the Commissioner will extend the time period for you to obtain a replacement asset. This ruling applies for the following periods : Year ending 30 June 20XX Year ending 30 June 20XX The scheme commenced on: 1 July 20XX
You and your spouse had a holiday home. In a previous year, the house on the property was destroyed by fire. The fire was as a result of an itinerant person squatting in the house and causing a fire to break out. The fire brigade was unable to save the house as the intruder was threatening them with violence. In the period subsequent to that event, you and your spouse dealt with your insurance company and settled the claim in in the following year. The vacant land was sold later in the year, with settlement a couple of months after the sale date. The fire event itself was very stressful for you as you were extremely fond of the unique property and aspired to spending more time there as you approached retirement. The intruder returned to the immediate area, which added further stress to any visit to the property. The months from the fire until the final disposal and settlement of the property was a time of stress and uncertainty. The process of the insurance valuation of the property was complex and protracted given the nature of property. COVID restrictions and sporadic lockdowns resulted in further delays recommencing the process of finding a replacement holiday home.
You are seeking an extension to find a replacement asset.
Income Tax Assessment Act 1997 section 124-75