Private ruling: Non-commercial losses - special consideration
Date of advice: 2 August 2021
Published: October 2021
Ruling period: 1 July 20XX to 30 June 20XX | 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 35-55 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in the calculation of your taxable income for the 20XX-XX and 20XX-XX financial year? | A1: Yes. Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control. It is also accepted that, but for the special circumstances, you would have made a tax profit, and you have met, or would have met one of the four tests. Consequently, the Commissioner will exercise his discretion.

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 sole trader. You carried on a non-primary production business. You became injured in XXXX and required an operation. The injury prevented you from carrying out your normal profit-making duties which caused a significant reduction in business income. You carried on the business at a loss attempting to rehabilitate from the injury. In the 20XX-XX financial year you made the decision that you would never fully rehabilitate form the injury and closed the business. The business has always produced a profit, up until you become injured.

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)


This ruling applies for the following periods: