Private ruling: Non-commercial losses
Date of advice: 12 February 2020
Published: March 2020
Ruling period: Income year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your lamb and wool business in the calculation of your taxable income for the 2018-19 income year? | 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 run a rural property. You purchased the property with the aim of selling livestock. These will be produced from your breeding stock. You originally had some livestock on the property brought from another of your properties. They were not on the property when you purchased it. You purchased additional livestock. You purchased breading livestock. These are currently being mated and are expected to deliver in the 2019-20 income year. You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You submit that you were affected by special circumstances in the 2018-19income year. A family member became terminally ill and you could not spend the required time to commence and grow your livestock business You have passed one of the commerciality tests for the 2019-20 income year. You also earn some income from your other businesses. You do this in order to retain your industry licences as your time is taken up with the other business.

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)(a) | Income Tax Assessment Act 1997 subsection 35-55(2)