Private ruling: Non-commercial losses and the Commissioner’s discretion for special circumstances
Date of advice: 8 January 2019
Published: April 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 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 carry on a business in a partnership of livestock farming. You submit that you were affected by special circumstances in the 20XX-XX financial year. Due to drought the business has incurred additional fodder costs to feed the livestock. Also, the business incurred additional veterinary fees due to your livestock becoming severely infected by parasites. XXX livestock died and over XXXX were affected and as a result were sold prematurely and grossly under value. The business spent over $XXX,XXX on replenishing the livestock numbers.

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)