Private ruling: Non-commercial losses – fruits – under $250 000 income
Date of advice: 29 March 2018
Published: June 2018
Ruling period: ● Year ended 30 June 2018 | ● Year ended 30 June 2019 | ● Year ended 30 June 2020
Date scheme commenced: 1 July 2017

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 lime and banana farming in the calculation of your taxable income for 20xx-xx to 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 one of the four tests being passed. It is also accepted that you will pass one of the four tests or make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 20xx-xx to 20xx-xx financial years.

Relevant facts and circumstances: You satisfy the income test in 35-10(2E) of the ITAA 1997. Your business activity commenced in the 20xx-xx financial year. You will be planting your product in June 20xx. Grafted trees take x years to bear fruit and x years to reach commercial production. You expect your business to make a profit within x-x years. You provided projected income data indicating that you will satisfy the assessable income test in the 20xx-xx financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 35-55 | Income Tax Assessment Act 1997 section 35-30 | Income Tax Assessment Act 1997 section 35-10(2E)