Private ruling: Non-commercial losses
Date of advice: 23 April 2021
Published: July 2021
Ruling period: Financial year ending 30 June 20XX | Financial year ending 30 June 20XX | Financial year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your business in the calculation of your taxable income for the 20XX-XX, 20XX-XX and 20XX-XX financial years? | A1: Yes Having regard to your circumstances, the Commissioner is satisfied that it would be unreasonable to apply the non-commercial loss rule. 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 met one of the four tests. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . Your business activity has been impacted by special circumstances being your spouse's serious and ongoing illness. Your business had been profitable in the preceding years. You estimate that, had it not been but for special circumstances, you would have achieved a profit and met one of the four tests in each ruling period 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)