Private ruling: Non-commercial losses - special circumstances
Date of advice: 24 August 2021
Published: November 2021
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)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-XX financial year? | A1: Yes Having regard to your full circumstances, it is accepted that it is the nature of the business activity that has prevented one of the four tests being passed. It is also accepted that you will pass one of the four tests or make a tax profit within the commercially viable period for your industry. Consequently, the Commissioner will exercise his discretion in the 20XX-XX financial year.

Relevant facts and circumstances: You satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You commenced a XXXX business in the 20XX financial year and had start-up expenses. There was a delay in the set-up of the business due to the impacts of Covid-19 and the ensuing lockdowns. You have provided independent evidence that attests to a lead time for your industry. The method that you use in the XXXX process requires resting time for the XXXXXX to blend. You intend to produce at least $XXX assessable income in the 20XX-XX 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) | Income Tax Assessment Act 1997 paragraph 35-55(1)(b)


This ruling applies for the following period: