Private ruling: Non-commercial losses
Published: March 2014
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Can you offset your deferred losses to the year ended 30 June 2012 against your other income in the 2011-12 financial year? | A1: Yes.

Relevant facts and circumstances: You have accumulated deferred losses to the year ended 30 June 2011 and losses to the year ended 30 June 2012. Your business passed the assessable income test in the 2011-12 financial year. You meet the income requirement for non-commercial loss purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 35-55

Reasons for decision: Summary: Paragraph 13 of Taxation Ruling TR 2001/14 states; The loss deferral rule in subsection 35-10(2) will not apply to the individual undertaking that activity for an income year if the relevant business activity: (a) satisfies at least one of the tests, and for the 2009-10 and later income years, the individual in question meets the income requirement; or (b) comes within the Exception; or (c) has a favourable exercise of the Commissioner's discretion. The individual will be able to deduct the excess deductions against other assessable income where the rule does not apply. In your situation for the 2011-12 financial year you satisfy the income requirement and you have met the assessable income test. Therefore the accumulated losses and the loss to 30 June 2012 can be offset against your other income.