You can apply for a Commissioner's discretion if you:
- have special circumstances outside your control
- meet the income requirement and the nature of the business activity means you will not pass a test, however, you expect your business activity will meet one of the tests or make a tax profit within the commercially viable period for your industry
- do not meet the income requirement, because of the nature of the business activity for the most recent income year where your business activity has not made or will not make a tax profit and there is an objective expectation your business activity will make a tax profit within the commercially viable period for your industry.
Changes to the operation of the non-commercial loss rules apply for the 2009–10 and later income years. There is now a Commissioner's discretion for individuals who do not meet the income requirement but whose business activity is commercially viable.
If you are applying for the discretion on the grounds of special circumstances, you should apply as soon as possible after those circumstances have occurred. However, we will accept applications within the normal amendment period for that income year.
If you are applying for the discretion on the grounds of lead time, you should apply for the first year you have excess deductions you wish to offset against other income. To ensure you have provided all the necessary information for us to consider your application for the Commissioner's discretion, you must complete and answer all questions in the application.
If you later realise you could have applied for the Commissioner's discretion, you may do so and, if granted, request an amendment of the relevant income tax assessment within the normal amendment period.
- Non-commercial losses for the income requirement and four tests
You must apply for the discretion using Private ruling form (non-commercial losses) and provide relevant information, including evidence from independent sources (where available) that objectively establishes that you meet the conditions for the Commissioner's discretion. You will also need to complete the Non-commercial losses: evidentiary checklist as part of your application.
We will notify you of the decision in writing.
The duration of a Commissioner's discretion will be decided on a case-by-case basis. The Commissioner may decide that the discretion can apply to future years as well, but it depends on the particular circumstances of each request. We consider factors such as special circumstances, the nature of the business and lead times when determining the length of the discretion.