Private ruling: Commissioner's discretion - non-commercial losses
Date of advice: 11 January 2022
Published: April 2022
Ruling period: Financial year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise discretion under paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business in the calculation of taxable income for the 20XX-XX income year? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner has granted discretion. It is accepted that your business activity was affected by special circumstances outside your control, which caused you to make a loss in the 20XX-XX income year. Further information on the 'Commissioner's discretion - special circumstances' can be found by searching 'QC 61248' on ato.gov.au

Relevant facts and circumstances: You commenced your business activity on XX/XX/20XX. You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. Your business satisfied the non-commercial losses - assessable income test in the 20XX-XX financial year. COVID-19 impacted travel, and subsequent lockdowns meant people were not out and requiring your services. COVID-19 also impacted your health and you are suffering with a medical condition. Your medical condition prevented you from working the business throughout the 20XX-XX income year and you failed the assessable income test. You maintained your licenses and insurances to allow a re-commencement of your business when your health improves. You have accessed your income protection insurance which required an independent assessment of your health along with monthly declarations from both you and your doctor. You are hopeful that the continuing professional medical treatment you are receiving will assist with you being able to operate your business again.

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)