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Edited version of your written advice
Authorisation Number: 1051248952639
Date of advice: 22 July 2017
Ruling
Subject: Non-commercial business losses and the Commissioner's discretion
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the ITAA 1997 to allow you to include any losses from your primary production business activity (the activity) in your calculation of taxable income for the 2015-16 and 2016-17 financial years?
Answer
Yes
Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented one of the four tests being passed. It is also accepted that you will pass one of the four tests or make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 2015-16 and 2016-17 financial years.
For more information on non-commercial losses, please visit our website at https://www.ato.gov.au/Business/Non-commercial-losses, or search quick code QC 33774 at www.ato.gov.au.
This ruling applies for the following periods:
Year ended 30 July 2016
Year ended 30 July 2017
The scheme commences on:
1 July 2015
Relevant facts and circumstances
You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You commenced carry on the activity in the 2015-16 financial year.
The activity is primary concerned with growing crops.
The crops from the first year of harvest (2016-17 financial year) was kept for 'feed stock’, to replant in the following year.
You advise of a lead time of two years for your industry.
You intend to make $X in assessable income in the 2017-18 financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Paragraph 35-55(1)(b).
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