Private ruling: Non-commercial losses - Commissioner's discretion - special circumstances
Date of advice: 16 September 2025
Published: 10 November 2025
Ruling period: Year Ended 30 June 20XX | Year Ended 30 June 20XX | Year Ended 30 June 20XX
Date scheme commenced: July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your non-primary production business activity in your calculation of taxable income for the 20XX, 20XX and 20XX financial years? | A1: Yes. Summary Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control and these prevented you from making a tax profit. Consequently, the Commissioner will exercise their discretion in the 20XX, 20XX and 20XX financial years.

Relevant facts and circumstances: You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. In January 20XX, you were involved in a car accident and incurred a spinal injury. As a result, you are dealing with pain, impacting your ability to function properly and work properly. You had a conversation with medical professionals and discussed pain management courses to undertake, and a surgery that would improve your pain. You then carried on a business via a website. You anticipated that operating this business would not be physically demanding. You expected that any required physical activity would persist of mostly standing, light walking and very light lifting. Meanwhile, your pain subsided. After the planned surgery, you had a small amount of pain relief. You then went onto having another surgery for further pain management. In the 20XX, 20XX and 20XX financial years, your injury impacted the profitability of your business activity in the following ways: • Complications from the initial surgery required further surgeries. • Following each surgery, you were required to take time away from your business. • Before you could recover from each surgery, you would experience a further complication. As a result, you were unable to operate your business as anticipated. • Medical professionals concluded that apart from the treatment and surgeries already done, as well as exercises, there is no further treatment that can be offered. You realised you were going to have live with the pain. This is even though you have considered all possible approaches to minimise the pain. • Due to your long-term condition, you decided to cease your business. In the 20XX, 20XX and 20XX financial years, your business has been making a loss. For the 20XX, 20XX and 20XX financial years, you expected the activity to make a profit if it were not for the circumstances that impacted your business.

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)(a)