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  • Offsetting current year business losses

    If you're a sole traders or individual partner in a partnership, and you meet at least one of the non-commercial losses requirements, you can offset your business losses against other assessable income (such as salary or investment income) in the same income year.

    The non-commercial business loss requirements are:

    • Your business is a primary production business or a professional arts business and you make less than $40,000 from other sources (excluding net capital gains) in an income year.
    • Your income is less than $250,000 (disregarding any assessable First Home Super Saver Scheme released amount) and either  
      • your assessable business income is at least $20,000 in the income year
      • your business has produced a profit in three out of the past five years (including the current year)
      • your business uses, or has an interest in, real property worth at least $500,000, and that property is used on a continuing basis in a business activity (this excludes your private residence and adjacent land)
      • your business uses certain other assets (excluding motor vehicles) worth at least $100,000 on a continuing basis.
    • You have been granted a Commissioner's discretion allowing you to offset the loss.

    If you don't meet any of these requirements, you can defer the loss or carry it forward to future years. If your business makes a profit in a following year, you can offset the deferred loss against that profit.

    See also:

    Last modified: 20 Jun 2019QC 33729