Private ruling: Non-commercial losses
Date of advice: 6 June 2018
Published: August 2018
Ruling period: 30 June 20XX
Date scheme commenced: 1 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 business activity in your calculation of taxable income for the 2016-17 financial year? | A1: Yes Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control. It is also accepted that, but for the special circumstances, you would have made a tax profit, and you have met, or would have met one of the four tests. Consequently the Commissioner will exercise his discretion in the 2016-17 financial year. For more information on non-commercial losses, please visit our website at https://www.ato.gov.au/Business/Non-commercial-losses/ , or search quick code QC 33774 at www.ato.gov.au .

Relevant facts and circumstances: Your income for non-commercial loss purposes for the 20XX-XX financial year is less than $xxx. You operate an activity as a sole trader for a number of years. The business has a turnover of approximately $xxx and has reported a profit in all years except 20XX. Your business has been affected by special circumstances during the 20XX-XX financial year. These special circumstances resulted in the business turnover deceasing making a loss form the business. You expect your business to return to profit in the 20XX-XX 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)(a)