Private ruling: Commissioner’s discretion for non-commercial business losses
Date of advice: 18 December 2018
Published: April 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

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 2018 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 caused you to make 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 <$250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . You commenced business operations originally in the xxxx financial year but ceased a few years later. The business recommenced in the 2016-17 financial year when you purchased a property and livestock. Your business was affected by severe drought in the 2017-18 financial year. Due to the drought you have experienced additional expenses due to the need to continue purchasing feed. The additional feed cost due to the drought has caused a loss in the business in the 2017-18 financial year. You have provided cash flow figures that show that the business should make a profit in the 2018-19 financial year.