Private ruling: Non-commercial business loss
Date of advice: 16 March 2022
Published: May 2022
Ruling period: Financial year ending 30 June 20XX | Financial year ending 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 business activity in your calculation of taxable income for the 20XX to 20XX financial years? | A1: Yes. Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control and that these prevented you meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 20XX to 20XX financial years.

Relevant facts and circumstances: You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a XX business. You commenced business operations in the 20XX financial year. In the 20XX and 20XX financial years COIVD-19 impacted your business activity. Your business was impacted in the following ways : • The Government imposed lockdown restricting movement within the State • This meant that you were unable to fish outside of your local area so greatly reduced the number of fish caught. • Due to this your business was unable to meet the assessable income test and you suffered losses. From the difference in fishing sales between Q4 20XX compared to Q4 20XX and 20XX financial year, it is accepted that without the impact of the COVID-19 pandemic you would have been able to meet the assessable income test.

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)