Private ruling: Non-commercial losses - Commissioner's discretion special circumstances
Date of advice: 6 October 2020
Published: November 2020
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 01 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your business activity in the calculation of your taxable income for the 20XX-XX financial year? | A1: Yes Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au.

Relevant facts and circumstances: You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You identified a suitable building to conduct your business activity from and commenced renting the property as of the XX January 20XX. You had building contacts to ensure the building was suitable for your business activity with completion dates prior to the XX April 20XX to facilitate the commencement of business activity. You projected your income for the 20XX-XX financial year would be greater than $20,000 if you had operated for the full income year. Your actual income received was severely impacted due to extraordinary circumstances which caused you to have to delay the commencement of your business activity. When the impact of the extraordinary circumstances eased such that you were able to commence trading, you achieved sales of income greater than $20,000 in the first full month of operation.

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 subsection 35-30(b) | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)