Private ruling: Non-commercial losses
Date of advice: 21 May 2020
Published: June 2020
Ruling period: Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ended 30 June 2021
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise his discretion to allow you to include any losses from your primary production business in the calculation of your taxable income for the 2017-18 to 2020-21 financial years? | 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 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 legislative provisions: Income Tax Assessment Act 1997 - Section 35-1. | Income Tax Assessment Act 1997 - Subsection 35-10(2E). | Income Tax Assessment Act 1997 - Subsection 35-55(1) | Income Tax Assessment Act 1997 - Paragraph 35-55(1)(c).


Relevant facts: You commenced a primary production business activity in the 2017-18 financial year. | The business activity involves livestock breeding activities using elite stock to breed a superior commercial herd for sale. | Your breeding activities also include the use of frozen embryos imported for overseas. | The business has taken time to establish and you will commence selling your livestock at public auction from the 2020-21 financial year. | Your projected profit and loss figures show an initial income amount in the 2020-21 financial year resulting in a small loss and an increase in income in the 2021-22 financial year resulting in a profit. | Your income for non-commercial loss purposes is above $250,000