Private ruling: Non-commercial loss
Date of advice: 16 November 2018
Published: March 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: XXXX 20XX

Ruling: Q1: Does your activity amount to the carrying on of a business? | A1: Yes. You meet the relevant factors contained in Taxation Ruling TR 97/11 Income tax: who should be assessed to interest on bank accounts?. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au | Q2: Do the deferral rules in section 35-10 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to defer your primary production business loss for the 20XX-XX financial year? | A2: No. You pass the real property test in section 35-40 of the ITAA 1997.

Relevant facts and circumstances: You purchased farming land and commenced the activity as a sole trader. You commenced the activity with the purchase of XX, and are currently operating at XX head with future plans to grow to a total of XX. The farming land is XXX acres across undulating grassland, deemed commercial and valued at more than $500,000. The whole of the property is used on a continuing basis in carrying on the activity. You obtained a letter from an independent consultant stating your current operations are indicative of an industry standard commercially viable activity. Projected profit and loss statements indicate that the activity will be profitable within X years. You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.

Relevant legislative provisions: Income Tax Assessment Act of 1997 section 35-10 | Income Tax Assessment Act of 1997 subsection 35-10(2E) | Income Tax Assessment Act of 1997 section 35-40