Private ruling: Non-commercial losses - Commissioner's discretion special circumstances
Date of advice: 29 May 2021
Published: August 2021
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: DDMMYY

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 primary production business activity in your calculation of taxable income for the income year ended 30 June 20XX? Answer Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You commenced business operations on DDMMYY as part of a partnership. The partnership carries on a primary production enterprise in country Australia. The partnership made a loss in the 20XX financial year due to the drought in the region. With lower income and costs remaining the same a loss was made. The partnership passed the assessable income test in that year. You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997 due to various payments received unique to that year. The partnership is expected to make a profit in the 20YY financial year (budget provided).

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 section 35-55 | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)


This ruling applies for the following period: