Private ruling: Commissioners discretion for non-commercial losses - special circumstances
Date of advice: 2 September 2021
Published: December 2021
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 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 your calculation of taxable income for the 20XX-XX, 20XX-XX and 20XX-20XX financial years? | A1: Yes Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control and that these prevented you from making a tax profit. Consequently, the Commissioner will exercise his discretion in the 20XX-XX, 20XX-XX and 20XX-20XX financial years.

Relevant facts and circumstances: You do not satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You are a partner in a partnership which carries on a primary production business on x properties. You commenced business operations in the 19XX-XX financial year. In the 20XX-XX, 20XX-XX and 20XX-20XX financial years drought impacted the profitability of your business activity. You would normally have x stock however the figures reduced each year during the drought and you suffered losses over three (3) financial years. Your business has previously produced a profit. You intend to return to profit in the 20XX-XX financial year.

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)


This ruling applies for the following periods: