Private ruling: The Commissioner’s discretion for non-commercial losses
Date of advice: 11 May 2018
Published: July 2018
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 ( ITAA 1997) to allow you to include any losses from your primary production business activity in your calculation of taxable income for the 20XX to 20XX financial years? | A1: Yes. Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 20XX to 20XX financial years. Further information about non-commercial losses generally can be found on our website ato.gov.au by entering Quick Code QC33774 into the search bar at the top right of the page.

Relevant facts and circumstances: You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a business. The business is primarily concerned with primary production. You commenced business operations in the 20XX financial year. You have provided profit and loss statements that show in the 20XX financial year that you have produced $XXXX in assessable income and incurred $XXXX of deductible expenses. You project that for the 20XX financial year your cattle activity will produce $XXXX in assessable income and incurred $XXXX of deductible expenses. You project that for the 20XX financial year your cattle activity will produce $XXXX in assessable income and incurred $XXXX of deductible expenses. You intend to make a tax profit and satisfy the $20,000 assessable income test in the 20XX financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 35-10 | Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 section 35-30 | Income Tax Assessment Act 1997 section 35-55