Private ruling: Commissioner's discretion - non-commercial losses
Date of advice: 6 July 2022
Published: October 2022
Ruling period: Period Ended 30 June 20XX
Date scheme commenced: XX February 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in section 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in the calculation of your taxable income for the ruling period? | A1: Yes. Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside of your control and that these prevented you from meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 20XX income year.

Relevant facts and circumstances: You satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You commenced business in the specified income year. You operate a contracting business to primary producers. The region where you operate your business has been drought declared for a number of years. Due to the drought many of your customers did not require your services. You provided us with your total income for six income years.

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)