Private ruling: Commissioner's discretion - non-commercial losses
Date of advice: 29 September 2022
Published: December 2022
Ruling period: year ended 30 June 20XX | year ending 30 June 20XX | year ending 30 June 20XX | year ending 30 June 20XX | year ending 30 June 20XX | year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion to allow you to include any losses from your hardwood plantation business in the calculation of your taxable income for the 20XX - 20XX income years? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted there is a 'lead time' in the nature of your business activity and you will pass a test or make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au.

Relevant facts and circumstances: You are seeking the Commissioner's discretion for lead time based on the nature of your business activity for the 20XX to 20XX income years. Your income was less than $XXX in the 20XX income year therefore you satisfy the income requirement. You expect to meet the assessable income test in the 20XX income year. The focus of your business is a hardwood plantation with over XXX XXXXX plants. The current plantation is approximately XX years old and once mature, the products will be primarily sold into the pulp and paper market. You are responsible for day-to-day plantation management and longer-term strategic business planning. Your business engages site and office-based contractors to complete a variety of tasks in support of the plantation, including fire break maintenance, weed management and accounting services etc. This is a new business with a long-term lease commenced within the last few months, which will continue beyond harvest of the current plantation crop. Based on the location and rainfall level (less than 1000mm annual rainfall), this species of XXXXX is expected to reach maturity for harvesting between 15-20 years of age.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 35