Private ruling: Commissioner's discretion - non-commercial losses
Date of advice: 3 August 2022
Published: November 2022
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 any losses from your income producing activity in your calculation of taxable income for the income year ended 30 June 20XX? | 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 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 satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 (ITAA 1997). You carry on a non-primary production business. You became injured and required an operation. The business has always produced a profit, up until you became injured. You have on-going commitments which resulted in a loss during the relevant income tax year. You estimate that had it not been for the special circumstances outside your control, you would have been able to continue to work and made a tax profit. The special circumstances outside your control no longer affect you and you expect to meet the income requirements and one of the four tests in the 20XX-XX income 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)