Private ruling: Non-commercial losses - Commissioner's discretion special circumstances
Date of advice: 29 May 2021
Published: August 2021
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: DDMMYY

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 primary production business activity in your calculation of taxable income for the income year ended 30 June 20XX? Answer Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from making a profit. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You conduct a primary production business as a sole trader and in partnership. The businesses run approximately AAA head of stock on BBB acres in rural Australia. The business passes the assessable income test, real property test and Other assets test. You derived additional income in the relevant year over and above your usual income due to unique circumstances. These funds were used to improve pasture and the property overall. The business made a loss due to increased costs due to drought and the purchase and use of an asset under instant asset write off provisions. You expect to be profitable going forward due to projected income and expenditure based upon stock numbers, production levels and prices.

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)


This ruling applies for the following period: