Private ruling: Non-commercial loss - lead time
Date of advice: 9 April 2025
Published: 16 June 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the relevant income year? | A1: Yes . Having regard to 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.

Relevant facts and circumstances: You satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You registered an ABN and commenced your business during the relevant year. You incurred expenses setting up your business activity. You made a loss for the relevant income year. In your industry the accepted number of years before the activity is commercially viable is one year. You met the assessable income test in the next income year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 35 | 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)(b)