Private ruling: Income tax - non-commercial losses
Date of advice: 17 September 2019
Published: November 2019
Ruling period: Year ended 30 June 2019 | Year ending 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 cropping business in the calculation of your 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 non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You carry on a primary production business. Your business expected to earn more than $20,000 during financial year, but did not do so due to the financial impacts of the drought in your region. Your shire was declared by the State Government to be in drought during the financial year. Due to the drought your sales reduced due to the lower yield of the crop, resulting in the inability to produce enough income to exceed expenses. You expect to return to profit in 2021 and onwards with anticipated improvements in the seasonal forecasts.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Section 35-1. | 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)