Private ruling: Commissioner's discretion - income requirement not met
Date of advice: 12 September 2024
Published: 21 October 2024
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) 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-XX to 20XX-XX financial years? | A1: Yes. Having regard to your full circumstances, it is accepted that it is the nature of the business activity that has prevented you from making a tax profit. It is also accepted that you make a tax profit within the commercially viable period for your industry. Consequently, the Commissioner will exercise his discretion in the 20XX-XX to 20XX-XX financial years.

Relevant facts and circumstances: You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You are a partner in a primary production business of cattle farming with your spouse. You commenced your business activity on a specified date. You and your spouse operate the partnership and provided us with the partnership split. You made a substantial initial investment in the business. You intend to build a profitable breeding herd of around a specified number of cows over the next 3-5 years. You provided us with details on your heads of cattle for 2 financial years. You provided us with a copy of your projections for 5 financial years. You have provided independent evidence that attests to a commercially viable period of 3 years for your industry.

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)(c)