Private ruling: Commissioner's Discretion for non-commercial business losses
Date of advice: 14 July 2025
Published: 8 September 2025
Ruling period: 1 July 20XX to 30 June 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 to allow you to include the loss from your primary production business activity in the calculation of your taxable income for the year ended 30 June 20XX? | A1: Yes.

Relevant facts and circumstances: 1. Individual A conducts a business of mixed primary production on an X hectare property. 2. The business commenced in 20XX. 3. The business is conducted in partnership with individual B and individual C and employs a number of casual and permanent staff throughout the seasons. 4. The region experienced droughts in 20XX. 5. Due to the drought in the region, you have lost a significant portion stock. 6. You needed to sell the remainder of stock at a significantly lower value than usual. 7. You were forced to sell stock for less than XX% of prior year pricing with overhead costs remaining the same. 8. It is expected that a profit will be made in the 20XX financial year as the region received rain. If there is no significant weather events scheduled for the remainder of the financial year, you are expected to see an increase stock. 9. In the 20XX income year, your income for non-commercial loss purposes exceeded $250,000. 10. In the 20XX income year, the business produced as assessable income of at least $X0,000. 11. The business produced a tax profit in at least three out of the past five years. 12. You use property worth at least $X00,000 in conducting the business activity. 13. You use assets with a value of at least $X00,000 in conducting the business activity.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 35 | Income Tax Assessment Act 1997 subsection 35-10 | Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 subsection35-10(4) | Income Tax Assessment Act 1997 section 35-30 | Income Tax Assessment Act 1997 section 35-35 | Income Tax Assessment Act 1997 section 35-40 | Income Tax Assessment Act 1997 section 35-45 | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)