Private ruling: Non-commercial Losses – special circumstances
Date of advice: 18 October 2018
Published: December 2018
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion to allow you to include any losses from your business activity in the calculation of your taxable income for the 20XX - XX and 20XX-XX financial years? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner will exercise 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 satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . You operate a primary production business activity in a partnership. The property is located in an area that has been declared to be experiencing drought conditions. Your assessable income from other sources for the 20XX-XX financial year was above $XXX and will be approximately the same in the 20XX-XX financial year. Your planting in a normal rainfall year would occur mid-year with the harvest occurring at the end of the same calendar year. The conditions have not been favourable with the failure of your most recent crop due to a lack of rain; therefore there has been no harvest. The next opportunity will be mid next year with favourable rainfall to be harvested at the end of that calendar year. You have maintained your stud stock only with the intention to increase your stock numbers once the drought breaks.

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)