Private ruling: Non-commercial losses-primary production
Date of advice: 14 November 2025
Published: 5 January 2026
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)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production business in your calculation of taxable income for the 2023-24 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 and that these prevented you from meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 2023-24 financial year

Relevant facts and circumstances: You have been undertaking a primary production activity in partnership for nearly X years. You commenced this primary production activity in partnership with your spouse (married or de facto) but have separated from them in recent years. You suffered significant health issues in the relevant financial year. These health issues have severely limited your ability to continue in your primary production activity. You have received treatment for your health issues but can no longer undertake the labour associated with this primary production activity. You have found other permanent part time employment that is suited to your reduced physical ability. You are currently doing the minimum possible to keep the operation running. Your spouse has moved elsewhere and is no longer involved in the day to day operation of the primary production activity. You intend to clean the property on which you have been undertaking this activity up and offer it for sale in the near future. You have shown the property to X prospective buyer and are in discussion with real estate agents about the possibility of selling your property. You made a loss with your primary production activity in the relevant financial year. You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 paragraph 35-55(1)(a)