• The Commissioner's discretion

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    Product rulings

    Generally, if the non-commercial loss rules may affect an individual participant in an agribusiness managed investment scheme (MIS), the responsible entity for the MIS applies to us for a product ruling. They ask us to exercise our discretion to rule that the non-commercial loss rules will not apply to an individual participant in the MIS for a defined period.

    If discretion has been exercised for the MIS, it is generally because of the nature of the activity. That is, there is a lead time, typical for the industry concerned, between the commencement of the business activity and the production of assessable income.

    If discretion has been exercised for the MIS, individual participants are not required to defer any business losses from the MIS for the income years that are specified in the product ruling. These losses can be offset against other assessable income in the income year the loss is incurred.

    Next step:

    The responsible entity of the MIS, and not the participant, can apply for a product ruling. The application must include the additional information required to consider the non-commercial loss rules and to determine if we can exercise discretion under those rules.

    See also:

      Last modified: 24 Oct 2016QC 16137