Private ruling: Non Commercial Losses
Date of advice: 1 May 2019
Published: June 2019
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20YY | Year ended 30 June 20WW
Date scheme commenced: XX/XX/20AA

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production business in your calculation of taxable income for the 20XX to 20WW financial years? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted there is a 'lead time' in the nature of your business activity and you will make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au.

Relevant facts and circumstances: Your income for non-commercial loss purposes is expected to be above $250,000 in the relevant financial years. You have conducted extensive research and sought advice from industry experts in relation to the establishment of your primary production business. There is a period from when trees are planted to when the relevant agricultural commodity is produced. An industry expert is consulting on this project and projects that the business activity will make a tax profit in the 20ZZ financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 35-1. | Income Tax Assessment Act 1997 Subsection 35-10(2E). | Income Tax Assessment Act 1997 Subsection 35-55(1). | Income Tax Assessment Act 1997 Paragraph 35-55(1)(c).