Private ruling: Commissioner's discretion - non-commercial loss
Date of advice: 31 January 2023
Published: 20 March 2023
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-XX 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 making a tax profit. Consequently, the Commissioner will exercise his discretion in the 20XX-XX financial year.

Relevant facts and circumstances: Your income for non-commercial loss purposes was more than $250,000 in the relevant year. In a partnership, you operated a primary production business. This business had operated for many years. Financial statements were provided. Due to a serious medical condition your partner had to retire. If it were not for the special extenuating circumstances, you would have met the real property test.

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 subsection 35-30 | Income Tax Assessment Act 1997 paragraph 35-55(1)(b)