Private ruling: Non-commercial losses – lead time – primary production.
Date of advice: 29 March 2018
Published: June 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 subparagraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include losses from your business activity of primary production farming in the calculation of your taxable income for 20XX-XX and 20XX-XX 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-XX and 20XX-XX financial years.

Relevant facts and circumstances: You jointly purchased a farm in 20XX. You planted primary production seeds in September 20XX because there were no crop stools available at the time of purchase. You planted XX hectares with primary production crop in 20XX. You will commence harvesting your primary production crop in June or July 20XX. You expect to make a profit in the 20XX income year. Further you expect to pass the assessable income test in the same 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)