Private ruling: Non-commercial losses
Date of advice: 26 August 2021
Published: November 2021
Ruling period: 1 July 20XX to 30 June XXXX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 35-55 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production business activity in your calculation of taxable income for the 20XX-XX to 20XX-XX financial years? | A1: Yes, You have commenced a business of primary production. Due to the inherent nature of this activity you anticipate you will not meet one of the four tests set out in sections 35-30, 35-35, 35-40 or 35-45 ITAA 1997 or produce a tax profit until harvest. Having considered the relevant factors, the Commissioner has granted the discretion. Further information on 'Non-commercial losses and the Commissioner's discretion' 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 ITAA 1997. You are a sole trader undertaking a primary production activity which commenced in 20XX. Your income from other sources is greater than $XXX. You have experience in undertaking this type of primary production activity. You have conducted extensive research and sought advice from industry experts to understand the profitability of this income producing activity. Due to the inherent nature of the activity you do not expect to receive income until 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Section 35-1 | Income Tax Assessment Act 1997 - Section 35-30 | Income Tax Assessment Act 1997 - Section 35-55


This ruling applies for the following periods: