Private ruling: NNon-commercial losses - Commissioner's discretion
Date of advice: 9 July 2021
Published: September 2021
Ruling period: Income year ended 30 June 20XX | Income year ended 30 June 20YY
Date scheme commenced: 1 December 2020

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) for your activity in the income years ended 30 June 20XX and 20YY? | A1: Yes. Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you making a tax profit. The Commissioner will exercise his discretion in the income years ended 30 June 20XX and 20YY.

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 conduct business as a sole trader. You commenced business on DDMMYY when you acquired your first asset and it was available for hire. You have paid deposits on more assets which will be received and available for use during the income year ended 30 June 20YY. Your assessable income was not greater than your allowable deductions for the income year ended 30 June 20XX. This will occur in the income year ended 30 June 20YY as well. You project that your assessable income will be greater than your allowable deductions for the income year ended 30 June 20ZZ. You have derived over $20,000 from the activity since commencing less than a year ago.

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


This ruling applies for the following periods: