Private ruling: Non-commercial losses
Date of advice: 14 November 2025
Published: 5 January 2026
Ruling period: Year ended 30 June 20XX | The scheme commence on: | 1 July 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 X farming business in your calculation of taxable income for the 20XX-XX 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 from meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 20XX-XX financial year.

Relevant facts and circumstances: You have been undertaking a primary production activity in partnership for nearly X years. Your role in this partnership included day to day tasks such as keeping account, ordering and selling stock, and assisting with the physical labour associated with the activity. You commenced this primary production activity in partnership with your spouse (married or de facto) but have separated from them in recent years. You have since moved interstate and found other full time employment. You are no longer involved in the day to day running of the primary production activity but have been supporting its operation financially. Your partner has suffered significant health issues in the relevant financial year. These health issues have severely limited their ability to continue work on the primary production activity. Your partner was unable to maintain the stock you were carrying in your primary production activity and that stock has become unsaleable. Your partner is now doing the minimum work necessary to keep the operation running You and your partner intend to sell the property once it has been cleaned up The property has been viewed by one prospective buyer and discussions have been held with real estate agents on the possibility of selling your property. You made a loss with your primary production activity in the relevant financial year. You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)