Private ruling: Non-commercial losses and the exercise of the Commissioner's discretion due to special circumstances
Date of advice: 14 August 2020
Published: September 2020
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business in the calculation of your taxable income? | A1: 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 non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You do not satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You commenced your original primary production business operations over xx years ago. The business has expanded in the 20xx-xx financial year when you purchased a property and a number of stock. You submit that you were affected by special circumstances in the xxxx financial year. You advise that due to the drought you have experienced additional expenses due to the need to continue purchasing feed. You state that in the xxxx financial year the region and farm has experienced severe drought. As a result, you have additional expenses due to the constant requirement to feed and maintain the welfare of the livestock. The additional feed cost due to the drought has caused a loss in the business in the xxxx year. You will return a profit in the 20xx-xx financial year.

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)