Private ruling: Non-commercial losses - discretion
Date of advice: 16 January 2025
Published: 17 March 2025
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion in subsection 35-55(1) of the Income Tax Assessment Act 1997 to allow you to include any losses from your business activity in the calculation of your taxable income for the financial year ended 30 June 20XX? | A1: Yes

Relevant facts and circumstances: This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. On DD MM 20YY you commenced a business. You are conducting this business as a sole trader. You are working full time in this business. The business activity produced an assessable income of approximately $XXX between DD MM YY and 30 June 20YY. You have approximately $XXX,XXX in assets used in carrying on this business. In the financial year ending 30 June 20YY, this business made a tax loss of approximately $XX,XXX. Your relative recently passed away. As a result, the business conducted by your relative, was wound up. A dividend payment was made to you as part of the winding up process. The dividend payment was received in the financial year ended 30 June 20YY. This increased your adjusted taxable income for that year to approximately $XXX,XXX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 35 | Income Tax Assessment Act 1997 section 35-10 | 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)(c)