Private ruling: Non-commercial losses - special circumstances
Date of advice: 11 December 2020
Published: February 2021
Ruling period: Year ended 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 any losses from your eyelash extension business in the calculation of your taxable income for the 20XX financial year? | A1: Yes

Relevant facts and circumstances: You satisfied the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997. In early 20XX you commenced your business activity providing eyelash extension beauty services to clients. The COVID-19 pandemic was declared later that month, and as your business activity provided a beauty service, it was forced to close (lockdown) from XXX 20XX to XXX 20XX as directed by the NSW Government, resulting in a loss of income. You recommenced business activity after XXX 20XX and bookings were initially limited due to COVID-19 still present in the community. You expanded your business activity in the 20XX financial year to include the sale of eyelash accessories and candles, which you used in the salon. You expect to meet the assessable income test in the 20XX 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)