Private ruling: Non-commercial losses – Commissioner’s discretion
Date of advice: 15 March 2019
Published: May 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise the discretion in section 35-55 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production business activity in your calculation of taxable income for the 2017-2018 financial year? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. Your activity was impacted by special circumstances. Also, it is accepted that there is a 'lead time' in the nature of your business activity and you will make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You operate a livestock farming activity. You first acquired livestock for the activity in 20 17. Your activity was impacted by drought during the 2017-18 financial year. You project that you will make a profit in the 2018-19 financial year. You do not satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997 for the 2017-2018 financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Division 35 | Income Tax Assessment Act 1997 – section 35-10 | Income Tax Assessment Act 1997 – section 35-55