Private ruling: Commissioner's discretion special circumstances - non-commercial losses
Date of advice: 7 December 2020
Published: February 2021
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: Month X 20XX

Ruling: Q1: Will the Commissioner exercise his discretion to allow you to include any losses from your non-primary production business in the calculation of your taxable income for the 20XX-XX and 20XX-XX financial years? | A1: 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 passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au.

Relevant facts and circumstances: You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997. You run a home-based business. You also conduct business through your website. Your main source of income came from businesses which closed due to COVID-19 or they did not want to change suppliers due to the lockdown from COVID-19. This affected your ability to approach or gain new clients where you are located. Your business managed to make $X in sales over a number of months. You have provided a business plan with projected profit and loss which shows sales totalling more than $20,000 would have been achieved had you traded for the remainder of the financial year after commencement without the Government restrictions being imposed. You also earn income of around $X a year as an employee. Your business is registered for GST.

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 subsection 35-30(a) | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)