Private ruling: Non-commercial losses - Commissioner's discretion - special circumstances
Date of advice: 7 July 2020
Published: August 2020
Ruling period: Year ended 30 June 2019 | Year ended 30 June 2020
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business in your calculation of taxable income for the 2018-19 and 2019-20 financial years? | 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 caused you to make a loss. Further information on the ' Commissioner's discretion - special circumstances ' can be found by searching 'QC 61248' on ato.gov.au

Relevant facts and circumstances: You have operated a primary production business activity since 20XX. The business has only been able to produce limited crops in both the 2018-19 and 2019-20 financial years due to extended drought conditions in the region, resulting in a loss The business activity produced a profit in the 2016-17 and 2017-18 financial years prior to the drought. Your income for non-commercial loss purposes was over $250k in the 2018-19 and 2019-20 financial years. You expect the business activity to become profitable again in the 2020-21 financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Section 35-1. | Income Tax Assessment Act 1997 - Subsection 35-10(2E). | Income Tax Assessment Act 1997 - Subsection 35-55(1) | Income Tax Assessment Act 1997 - Paragraph 35-55(1)(a).