Private ruling: Non-commercial losses and the Commissioner’s discretion for special circumstances
Date of advice: 27 May 2019
Published: July 2019
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your business in the calculation of your taxable income for the 2018-19 financial year? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. 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 set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . You operate a primary production business. You employ a number of full-time staff. The region in which your farm is located has been experiencing a severe drought and a total of only 32mm of rain has fallen on the farm over the past XXX days. You met the assessable income test in the 2017-18 financial year. You have provided figures which show that but for the special circumstances you would have met the assessable income test in the 2018-19 financial year. You expect to meet the assessable income test in the 2019-20 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) and | Income Tax Assessment Act 1997 - Paragraph 35-55(1)(a).