Private ruling: Non-commercial business losses and the Commissioner’s discretion
Date of advice: 27 November 2018
Published: March 2019
Ruling period: Year ended 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 financial year? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

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 . Your business commenced near the end of the 20XX-XX financial year. Your business activity met the assessable income test for each of the 20XX-XX, 20XX-XX, 20XX- XX and 20XX-XX financial years. Due to a severe weather event your business activity suffered a substantial drop in income and consequently did not meet that assessable income test for the 20XX-XX financial year. The activity will be in a loss situation for the 20XX-XX financial year. You expect the activity to meet the assessable income test and become profitable in the 20XX-XX financial 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)