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Primary production losses

Last updated 2 July 2023

Check if non-commercial business losses apply.

Non-commercial business losses

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 that do not relate to your primary production business is less than $40,000, excluding any net capital gain
  • the sum of your taxable income (ignoring any business losses), reportable fringe benefits, reportable superannuation contributions and total net investment losses, is less than $250,000 and your business activity satisfies one of 4 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.

For more information, see:

  • Non-commercial losses
  • PCG 2022/1 Non-commercial business losses – Commissioner's discretion regarding flood, bushfire or COVID-19
  • TR 2001/14 Income tax: Division 35 – non-commercial business losses
  • TR 2007/6 Income tax: non-commercial business losses: Commissioner’s discretion.

Continue to: Small business entity concessions for primary producers