Private ruling: Similar business activities for non-commercial losses
Date of advice: 23 April 2020
Published: June 2020
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Are activities considered to be one business for the purpose of the non-commercial loss provisions in Division 35? | A1: Yes. Based on the facts you have supplied your activities are considered to be one business for the purpose of applying the non-commercial losses provisions.

Relevant facts and circumstances: For many years you have worked the same business activity. The business has expanded over time. Several years ago you added a new service. The new service was based in your existing business premises and promoted on the web along with your existing business. The new service developed along with your existing business and for the same clients. They were conducted at the same premises. You purchased the necessary equipment to expand the business. The equipment was also used in training programs conducted at the premises as well as for promotional purposes. Following training and the gaining of confidence through work completed to date, you actively promoted the new service to clients of your existing business and in conjunction with the other services provided. You considered the provision of the new service an additional service provided to the clients of the business and not a separate business operation for the non-commercial business loss provisions. The provision of the new service was not separately invoiced to clients. A room was set aside for the new service at your existing premises which assisted in the growth of the existing and new services offered to clients.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 35