Private ruling: Special circumstances for non-commercial losses
Date of advice: 29 September 2020
Published: November 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 business activity in the calculation of your taxable income for the 20XX-XX financial year? | 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 prevented you from passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au.

Relevant facts and circumstances: You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . You purchased a mobile business in the 20XX-XX financial year with a plan to trade at events on a weekly basis. You have experience in the relevant industry for your business activity and hold permits to conduct your business activity with a variety of local government bodies. You projected your income for the 20XX-XX financial year would be greater than $20,000 if you had operated for the full income year. Your actual income received was severely impacted due to extraordinary circumstances which caused you to have to put your business activity on hold. When the impact of the extraordinary circumstances eased such that you were able to recommence trading, you achieved sales income of approximately $XXX in a month.

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 35-30(b) | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)