Private ruling: Non-commercial losses business losses and grouping similar business activities
Date of advice: 22 November 2022
Published: 23 January 2023
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are your sole trader activities considered to be of a similar kind and able to be grouped together for the purposes of the non-commercial loss provisions in Division 35 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Having considered your circumstances and the relevant factors set out in Taxation Ruling TR 2001/14: Income Tax: Division 35 - non-commercial business losses your activities are able to be grouped together. The activities are considered to be of a similar kind as they are carried out at the same locations, use the same equipment and produce the same types of goods. Further information on grouping similar business activities for non-commercial business purposes can be found by searching 'QC 55241' on ato.gov.au

Relevant facts and circumstances: You operate 2 business activities as a sole trader. One of the business activities made a profit and the other business activity made a loss. You have provided a breakdown of income and expenses showing you expect to make a profit from your sole trader activities in the 20XX-20XX financial year. You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. Your 2 activities are carried out at the same locations, use the same equipment and produce the same types of goods. You did not satisfy one of the four tests in Division 35 of the ITAA 1997 in the 20XX-20XX, 20XX-20XX and 20XX-20XX financial years.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 35 | Income Tax Assessment Act 1997 section 35-10(3)