Private ruling: Non-commercial losses - Commissioner’s discretion
Date of advice: 10 April 2019
Published: May 2019
Ruling period: Year ended 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 01 July 2017

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 97) to allow you to include any losses from your primary production business in the calculation of your taxable income for the 2017-18 to 2019-20 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 natural disasters. It is also accepted that, but for these special circumstances outside your control, you would have made a tax profit, and you have met, or would have met one of the four tests. Consequently the Commissioner will exercise his discretion in the 2017-18 to 2019-20 financial years. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You do not satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a primary production business. You were affected by special circumstances in the 2017-18 and 2018-19 financial years. The impact on your business from those special circumstances will continue into the 2019-20 financial year. Prior to being impacted by special circumstances, your business was profitable.

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).