Private ruling: Non-commercial losses - special circumstances
Date of advice: 24 September 2020
Published: November 2020
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise his discretion to allow you to include any losses from your non- primary production business in the calculation of your taxable income? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner will exercise his discretion. It is accepted that your business activity was affected by special circumstances outside your control which caused you to make a loss. Further information on non - commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . You carry on a non-primary production business activity. During the 20XX-XX financial year the business was impacted by severe weather events which continued to impact the business in the 20XX-XX financial year. The weather events caused significant damage to the buildings and infrastructure which required extensive repairs and impacted the income produced by the business. As a result the business sustained net losses in the 20XX-XX and 20XX-XX financial years. If the business had not been affected by the weather events the business would have produced a profit, as it has done in prior 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)(a)