Private ruling: The Commissioner's discretion in relation to the non-commercial losses
Date of advice: 21 May 2020
Published: July 2020
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business in the calculation of your taxable income for the 20XX-YY income year? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your primary production business activity was affected by special circumstances outside your control, being drought, which resulted in it making a loss. 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 . You operate a primary production business. During the 20XX calendar year the region experienced the lowest rainfall on record. The business made a loss during the 20XX-YY income year as it was substantially impacted by drought including having to incur additional expenses to purchase fodder to feed the livestock during the drought.

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)