Private ruling: Non-commercial losses, commissioner's discretion
Date of advice: 18 December 2019
Published: February 2020
Ruling period: Year ended 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 the loss from your business in the calculation of your assessable income? | A1: Yes Having considered your circumstances and the relevant factors the Commissioner has granted the discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. Further information on non-commercial losses can be found on our website ato.gov.au by searching quick code 'QC 33774'.

Relevant facts and circumstances: You satisfy the income requirement set out in subsection 35-10(2E) of the ITAA 1997. You are currently operating a business as a sole trader. You commenced your business activity on X November 20XX. In the 20XX-XX financial year, your ill health reduced your capacity to work, resulting in a reduction in the assessable income received from your business. Due to your illness your business did not meet one of the four tests. You have provided a profit and loss statement which shows that your business activity has previously met the assessable income test. Additionally, your business activity has also met the assessable income test in the 20YY-YY 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)(a)