Private ruling: Non-commercial losses and Commissioner's discretion for special circumstances
Date of advice: 27 September 2017
Published: February 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the ITAA 1997 to allow you to include any losses from your business activity in your calculation of taxable income for the 2016-17 financial year? | A1: Yes Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control. Consequently the Commissioner will exercise his discretion in the 2016-17 financial year. For more information on non-commercial losses, please visit our website ato.gov.au and enter quick code QC 33774 into the search bar at the top right of the page.

Relevant facts and circumstances: You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a business. The business is primarily concerned with marketing and sales. You commenced business operations in the 2015-16 financial year. You submit that you were affected by special circumstances, being a chronic illness in the 2016-17 financial year. You have submitted the following evidence to substantiate your claim: ● A letter from your medical professional You submit that the special circumstances impacted on your business in the following ways: ● You have been suffering from an illness for the past 12 to 18 months ● Due to the illness, you were required to reduce the number of days you were able to work ● You were unable to work full time during the 2016-17 financial year, and you have now been reduced to working part time hours You will make a profit/make $20,000 in assessable income in the 2017-18 financial year.

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) and | Income Tax Assessment Act 1997 paragraph 35-55(1)(a).