Private ruling: Commissioner's discretion - income requirement not met
Date of advice: 12 December 2024
Published: 20 January 2025
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

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 business activity in your calculation of taxable income for the 2023-24 and 2024-25 financial years? | A1: Yes. Having regard to your full circumstances, it is accepted that it is the nature of the business activity that has prevented you from 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 2023-24 and 2024-25 financial years.

Relevant facts and circumstances: You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You purchased a property with the intention of running a farming business. This property is in a prime growing area. You have many years of experience and knowledge in your industry. You commenced business operations in a particular financial year. The business activity will make a tax profit within a period that is commercially viable for the industry. Financial data and projections were provided. You expect your business activity to make a profit in the 20XX-XX financial 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)(c)