Primary production losses

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

Non-commercial business losses

Since 1 July 2000, individuals with losses from carrying on non-commercial business activities (either alone or in partnership with others) may be required to defer those losses under the non-commercial business losses (NCL) measures. The NCL measures do not apply if:

• you operate a primary production business and your assessable income from other sources is less than $40,000, excluding any net capital gain
• your business activity satisfies one of four tests, or
• the Commissioner of Taxation exercises discretion to allow the loss to be claimed.

If the NCL measures do apply, the loss cannot be claimed in the year it arises. Instead, it is deferred to the next year in which you carry on the business activity or one of a similar kind. The deferred loss is offset against any profit from the activity in that future year. Whether any remaining loss can be offset against other income for that future year will depend on the operation of the NCL measures in that year.

Note

For further information, see Taxation Ruling TR2001/14 - Income tax: Division 35 - non-commercial business losses.