Private ruling: Commissioner's discretion - lead time
Date of advice: 22 December 2022
Published: 20 February 2023
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 35-55 of the Income Tax Assessment Act 1997 to allow you to include any losses from your primary production business activity in the calculation of your taxable income for the relevant financial years? | A1: Yes. The Commissioner is satisfied that your activity is carried on as a business. Having regard to your full circumstances, it is accepted that 'because of its nature' the business activity has prevented one of the four tests being passed. It is also accepted that you will pass one of the four tests or make a tax profit within the commercially viable period for your industry.

Relevant facts and circumstances: Your business activity commenced in the relevant year. The Farm is in Australia and operated by both of you. In the following year, fruit trees were planted on a number of acres on your property. Your income for non-commercial loss purposes in the income year prior to the income year of the ruling application was less than $250,000. You expect your business activity to meet one of the tests within the lead time. You have an agreement with another entity to grow the fruit and they will sell it.

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)