Private ruling: Commissioner’s Discretion- lead time
Date of advice: 25 May 2018
Published: July 2018
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production activity in your calculation of taxable income for the 2017-18 financial year? | A1: Yes Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 2017-18 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 financial year 2017-18 is more than $XYZ. You purchased a property during the 2016-17 financial year for the purpose of operating a primary production business (the activity) under a partnership structure. Since the purchase of the property your focus has been on infrastructure, with water allocation, farm sheds and power has been put on to the property. Over 60% of the fencing has allowed you to increase your stock holding. Primary production with load facilities have been established and seeded, and soil PH levels were corrected for the 2018 season. During the 2017-18 financial year the activity purchased XX beef steers, spread over several months in 2017. You have provided your projected cash flow showing that the activity will be profitable during the 2017-18 financial year. Assumption(s) None

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)(c)