Private ruling: Commissioner's discretion special circumstances
Date of advice: 17 March 2020
Published: April 2020
Ruling period: Year ended 30 June 20XX | 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 activity in the calculation of your taxable income for the 20XX-XX and 20XX-XX income years? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion for the 20XX-XX and 20XX-XX income years. It is accepted that your business activity was affected by special circumstances outside your control which caused you to make a loss or fail to meet a NCL test.

Relevant facts and circumstances: You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997. You acquired a property on which to operate a livestock breeding/trading business. You commenced operations in the 20XX-XX income year when you first purchased and sold livestock. Your property has been affected by drought. As a result of the drought conditions you have suspended trading livestock and reduced your herd that you have had to hand feed and agist. You have provided projections that demonstrate the impact of the drought on your activity.

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)