Private ruling: Non-commercial losses
Date of advice: 19 December 2024
Published: 28 January 2025
Ruling period: Year ended XX June 20XX | Year ended XX June 20XX
Date scheme commenced: XX July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 2022-23 and 2023-24 financial years? | A1: Yes. It is accepted that your business activity was affected by special circumstances outside your control and that these special circumstances prevented you from making a profit. Consequently, the Commissioner will exercise his discretion in the 20XX-XX and 20XX-XX financial years to allow you to include any losses from your business activity in the calculation of your taxable income.

Relevant facts and circumstances: Your income for non-commercial loss purposes for the relevant years is more than $XX. You have purchased an agricultural primary production operation in the 20XX-XX financial year. The plan for the operation was to develop resources to be sold. You also planned to further develop additional resources. In mid-20XX the property and surrounding area was affected by severe weather disaster. This greatly impacted the production of resources, due to be sold for the 20XX-XX financial year. Overall, the 20XX resources produced significantly less due to the impact of the natural disaster and sold for less than previous predications within the 20XX-XX financial year. For the 20XX season a smaller production was planned. There was no resource production income in the 20XX-XX financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10(1) | Income Tax Assessment Act 1997 subsection 35-10(2) | Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 paragraph 35-55(1)(b)