Private ruling: Non commercial losses
Date of advice: 1 August 2019
Published: October 2019
Ruling period: Year ending 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 to allow you to include any losses from your tax agent business in the calculation of your taxable income for the 2017-18 financial year? Answer Yes. Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control. It is also accepted that, but for the special circumstances, you would have made a tax profit, and you have met, or would have met one of the four tests. Consequently the Commissioner will exercise his discretion for the 2017-18 financial year. For more information on non-commercial losses, please visit www.ato.gov.au and search quick code QC 33774.

Relevant facts and circumstances: You do not satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a business that is primarily concerned with tax agent services. You commenced business operations in the 20XX financial year. You were diagnosed with a serious illness that prevented you from making a profit in the 20XX financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 paragraph 35-55(1)(a)