Issue: 317
Sent: 18-09-2012 13:51:02
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Fed policies to spur asset pricesSmall Business CGT Concessions
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Small Business CGT Concessions

Click here to buy - A How To Book of SMSF's by Tony Negline
Tony Negline

This week I'd like to talk about an aspect of the Small Business CGT Concessions.

In particular I'd like to refer to a Private Binding Ruling which was published on the ATO's PBR register on 8 August 2012.

The particular PBR is number 1012220933984.

The ruling says that in the 2009/10 financial year, the taxpayer sold the goodwill of their business for family reasons and elected to use the CGT small business rollover rule (which enables a taxpayer to purchase another business asset without incurring CGT when the original asset is sold).

In normal circumstances this rollover provision has to be accessed within 2 years but the legislation allows the ATO to grant a longer time-frame.

The taxpayer has asked the ATO for an additional 18 months - that is, a total of 3 years, 6 months.

The ATO told the taxpayer that in order to extend the allowable time it needed to consider all of the following:

In a nutshell the ATO wanted, at the very least, to see if there were circumstances beyond the taxpayer's control as to why they didn't find a replacement asset within the standard 2 year time-frame.

The taxpayer's sole excuse - according to the published PBR - is "family commitments" which the ATO rejected as an acceptable excuse. The ATO said this was "purely a personal and private decision ... and you have not provided any circumstances beyond your control that prevented you from acquiring a replacement asset."

It's clear that if you intend to apply for these types of extensions you need to provide a very good reason.

On another issue some of you might be wondering about my book. I'm happy to say that my book has been updated and has been published by Thompson Reuters as 'The Essential SMSF Guide". The book is now also endorsed by the Institute of Chartered Accountants. Further details are available here:

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This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.

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