Private ruling: Non-commercial loss - special circumstances
Date of advice: 10 December 2021
Published: March 2022
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)(a) 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 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 and that these prevented you meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the XXXX financial year.

Relevant facts and circumstances: You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a business. Your assessable income from other sources is more than $XXXX You commenced business operations in the XXXX financial year. In the XXXX financial year, the COVID19 pandemic impacted your business activity. Your business was impacted in the following ways: • Your business is dependent on tourism related revenue • The closure of domestic and international borders as a result of the pandemic significantly impacted the ability of your business to meet one of the four tests. You have supplied projections to support that your business would have met the $XXX assessable income You intend to make a profit and make $XXX in assessable income in the XXXX 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)