Private ruling: Non-commercial losses
Date of advice: 13 July 2017
Published: November 2017
Ruling period: Year ended 30 June 201B | Year ended 30 June 201C | Year ending 30 June 201D | Year ending 30 June 201E | Year ending 30 June 202F | Year ending 30 June 202G | Year ending 30June 202H | Year ending 30 June 202I
Date scheme commenced: 1 July 201A

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production activity in your calculation of taxable income for the 201A-1B to 202H-2I financial years? | 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. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 201A-1B to 202H-2I financial years. For more information on non-commercial losses, please visit our website at ato.gov.au and search for quick code QC 33774.

Relevant facts and circumstances: Your income for non-commercial loss purposes for the financial years 201A-1B to 202H-2I is more than $250,000. You are carrying on a business (the activity) which commenced in the 201A-1B7 financial year. You commenced your business in late 201A. You had ordered and paid for trees from a specialist nursery which were than planted on your property in mid 201B. A further number trees for planting in mid 201D have already been ordered. The independent evidence you provided suggests that the commercially viable period for this industry is about six to seven years. You state the business will make a profit in the 202H-2I 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) | Income Tax Assessment Act 1997 paragraph 35-55(1)(c)