Private ruling: Non-commercial losses - special circumstances
Date of advice: 23 December 2021
Published: April 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-XX financial year? | A1: Yes Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances, which was outside your control and these prevented you meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 20XX-XX financial year.

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 XX farming business. You traded in the 20XX-XX financial year. In the 20XX-XX financial year special circumstances impacted your business activity. Your business was impacted in the following ways: • your farm suffered X insect infestation • the infestation contributed to a severe reduction of marketable XX produced, therefore significantly impacted your business income. You previously met the assessable income test.

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