Private ruling: Non-commercial losses and the Commissioner's discretion for special circumstances
Date of advice: 1 June 2019
Published: July 2019
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your business in the calculation of your taxable income for the 20XX-XX and 20XX-XX financial years? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You satisfy the income requirement set out in subsection 35-10(2E) of the ITAA 1997. You work part time in a business which commenced on XX October 20XX. In the 20XX-XX financial year you could not work due to health reasons which is continued into the 20XX-XX financial year. You have been having ongoing treatment and you are hoping to return to work in the 20XX-XX financial year. You have received income protection insurance payments for the period of time that you have not been able to work. You have provided a profit and loss statement that shows but for the special circumstances, the business activity was meeting the assessable income test. You expect to meet the assessable income test and make a profit 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) and | Income Tax Assessment Act 1997 - Paragraph 35-55(1)(a).