Guide to non-commercial losses

Deferring a non-commercial loss

Your loss must be deferred (postponed to a future year) if the non-commercial loss rules prevent you from claiming it in the current year.

If your business makes a profit in a following year, you can offset some or all of the deferred loss against this profit, up to the amount of your profit.

You can also claim the deferred loss against other income in a following year if during that year:

• you meet the income requirement and the business passes one of the four tests
• you qualify for the exception granted to artists and primary producers
• your loss is solely due to a deduction you claimed for the small business and general business tax break (2009-10 and 2010-11 income years), or
• the Commissioner has exercised the discretion to allow you to claim the loss.

Effects on ABN, GST and PAYG

Deferring your loss doesn't affect your entitlement to hold an Australian business number (ABN) or claim goods and services tax (GST) credits and doesn't change your pay as you go (PAYG) withholding.

If your business ceases

If your business ceases and you have a deferred non-commercial loss, the non-commercial loss measures may still apply.

Non-commercial losses - home

Sections within Deferring a non-commercial loss

• Effects on ABN, GST and PAYG
• If your business ceases