Private ruling: Non-commercial loss
Date of advice: 21 August 2019
Published: October 2019
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business in the calculation of your taxable income for the 2017 - 18 financial years? | A1: Yes

Relevant facts and circumstances: You and your spouse purchased an existing boutique vineyard. The vineyard did not come with any of the existing stock or harvest. Harvest is in January/February each year Due to the grape varieties grown on the vineyard, most of the wines require substantial aging time in barrels. Comprehensive business plan shows a profit in the year ending 30 June 20 19

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

Reasons for decision: Summary: Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion for the 2016-17 to 2017-18 financial years. For more information on non-commercial losses, please visit ato.gov.au and search quick code QC 33774.