Private ruling: Non-commercial losses and the exercise of the Commissioner's discretion - lead time
Date of advice: 23 June 2021
Published: August 2021
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 to allow you to include any losses from your apiary business activity in the calculation of your taxable income for the financial year ending 30 June 20XX? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner has granted his discretion. It is accepted there is a lead time in the nature of your business activity and you will pass a test or make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You satisfy the income requirement of less than $250,000 set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 for the 20XX financial year. On X XX 20XX, you commenced your apiary business activity located in xx on ten hectares of private property adjacent to the XX. You previously managed XX beehives in XX as a hobby. You brought in XX beehives when you commenced your apiary business activity in XX. In addition to the XX existing beehives, you purchased XX packages of bees between November 20XX and December 20XX from a commercial bee supply company. A package of bees comprised approximately XX bees and a queen bee. The bee packages were installed creating the colonies and apiary. Due to the extremely bad summer condition, you lost XX beehives and were unable to generate sales of honey to this date. You expect to have your first harvest of approximately XXkg of honey in XX 20XX to be sold at $XX/kg between XX 20XX and XX 20XX. You are planning to order a further XX packages of bees in July 20XX to increase the number of beehives to XX. You expect to meet the assessable income test in the 20XX financial year with a projected income of $XX and will further increase in the succeeding years.

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)(b)


This ruling applies for the following period: