Private ruling: Non-commercial Losses - special circumstances
Date of advice: 18 April 2019
Published: June 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business in the calculation of your taxable income for the 2017-18 financial year? | 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 meeting the assessable income 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 operate a fruit farming activity. Prior to the 2017-18 financial year the activity was meeting the $20,000 assessable income test each year. The activity does not meet any of the other three non-commercial loss tests. Your business activity was severely impacted by a pest infestation. The activity was in a loss situation and did not satisfy the $20,000 assessable income test for the 2017-18 financial year. You expect the activity to meet the $20,000 assessable income test in the 2018-19 financial 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)