Private ruling: Non-commercial losses
Date of advice: 13 July 2017
Published: September 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: A1: Yes. Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control. It is also accepted that, but for the special circumstances, you would have made a tax profit, and you have met, or would have met one of the four tests. Consequently the Commissioner will exercise his discretion in the 2015-16 financial year. For more information on non-commercial losses, please visit our website at ato.gov.au and search for quick code QC 33774.

Relevant facts and circumstances: Your income for non-commercial loss purposes for the 2015-16 financial year is over $250,000. You have been in the business of primary production since 198X. You are carrying on a business (the activity). You submit that you were affected by special circumstances in the 2015-16 financial year. You have submitted the following evidence to substantiate your claim: ● Profit and loss statements from 2015 to early-mid 2016 ● Global movements in the value of the product you supply are well outside 'normal' industry standards. ● Aligning price movement to industry averages in 2016 would put the business in a breakeven/profitable position.

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)


Subject: Non-commercial losses: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 2015-16 financial year?