Private ruling: Non-commercial losses - special circumstances
Date of advice: 27 August 2021
Published: November 2021
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) 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 20XX, 20XX and 20XX income years? | A1: Yes. Having regard to your circumstances and relevant factors the Commissioner has granted the discretion. It is accepted there are special circumstances which prevented your business from making a tax profit or meeting an objective test in the 20XX income year, and will prevent your business from making a tax profit or meeting an objective test in the 20XX and 20XX income years.

Relevant facts and circumstances: You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. Your business activity of primary production commenced in the 20XX income year. You have planted XXXX and XXXXXX plants beginning in the 20XX calendar year. XXXXX plants take X years to bear fruit and XX years to reach commercial production. Special circumstances have impacted your business in the following ways: • A family member, who assists on the farm, was diagnosed with a significant medical condition. • You have spent a lot of time away from the farm while your family member receives medical treatment, which meant you could not spend time on the farm. • Extreme wet weather in 20XX meant you were unable to get a grader into the hill up the mounds for the plants and there were delays in planting XXXXX. • Extreme wet weather in 20XX impacted XXXX supply from nursery due to grafting issues. In July 20XX XXXXX plants have begun to bear fruit and you are anticipating approximately X tray per plant from July 20XX and increasing over time. Revenue from XXXXXX sales is approximately XX months away. You expect to make assessable income of at least $XXX in the 20XX income year.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10 | Income Tax Assessment Act 1997 paragraph 35-55


This ruling applies for the following periods: