Private ruling: Non-commercial losses
Published: October 2011
Ruling period: Year ended 30 June 2008 to year ended 30 June 2024
Date scheme commenced: 1 July 2007

Ruling: Q1: Will the Commissioner exercise the discretion in section 35-55 of the Income Tax Assessment Act 1997 to allow you to include any losses from your forestry activity in the calculation of your taxable income for the 2007-08 to 2023-24 financial years? | A1: Yes.

Relevant facts and circumstances: You are undertaking a forestry business. You have provided information that shows that you will make a tax profit within the commercially viable period for your industry. Your income for non-commercial loss purposes is in excess of $250,000.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Section 35-1. | Income Tax Assessment Act 1997 - Subsection 35-10(2E). | Income Tax Assessment Act 1997 - Section 35-55

Reasons for decision: Summary: You have requested the Commissioner to exercise his 'lead time' discretion for the 2007-08 to 2023-24 financial years so that you are not required to defer any losses from your forestry business activity under the non-commercial loss provisions. The 'lead time' discretion may be exercised for the income years in question where: · it is in the nature of your business activity that there will be a period before a tax profit can be produced; and · there is an objective expectation your business activity will produce a tax profit within the commercially viable period for your industry. Having regard to your full circumstances, it is accepted that any losses in the years in question have been, or will be, the result of the nature of the business activity. 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 for the 2007-08 to 2023-24 financial years.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.