Private ruling: Commissioner's discretion - non-commercial losses
Date of advice: 3 November 2022
Published: 9 January 2023
Ruling period: Year ended 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 the calculation of your taxable income for the 20XX income year? | A1: Yes. Having regard to your circumstances, it is considered that your XXXX business had been affected by special circumstances outside your control and had these circumstances not existed, the activity would have satisfied the assessable income test under 35-30 of the ITAA 1997 for year ending 30 June 20XX.

Relevant facts and circumstances: You commenced your business in 20XX financial year and made a tax loss in that year. You met the assessable income test in section 35-30 of the ITAA 1997 for 20XX financial year You made a tax loss for 20XX financial year. You had a carried forward tax loss as at 30 June 20XX. You had received a salary and wage income for 20XX financial year. You received parenting payment single for 20XX financial year. You satisfy the less than $250,000 income requirement contained in subsection 35-10(2E) of the ITAA 1997 for the 20XX financial year. You were unable to operate under the normal trading conditions due to government-imposed restrictions and had no business income for 20XX income year. If not for the special circumstances, you would have met the assessable income test in section 35-30 of the ITAA 1997 for 20XX financial year. You intend to make $XXX in assessable income in the 20XX financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 35-10 | Income Tax Assessment Act 1997 Section 35-30 | Income Tax Assessment Act 1997 Section 35-55