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Primary production losses

Last updated 8 February 2006

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.

Where 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.

For further information, see Taxation Ruling TR 2001/14Income tax: Division 35-non-commercial business losses.