| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051251656322
Date of advice: 13 July 2017
Ruling
Subject: Non-commercial losses
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production activity in your calculation of taxable income for the 201A-1B to 202H-2I 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 you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 201A-1B to 202H-2I financial years.
For more information on non-commercial losses, please visit our website at ato.gov.au and search for quick code QC 33774.
This ruling applies for the following period(s)
Year ended 30 June 201B
Year ended 30 June 201C
Year ending 30 June 201D
Year ending 30 June 201E
Year ending 30 June 202F
Year ending 30 June 202G
Year ending 30June 202H
Year ending 30 June 202I
The scheme commences on
1 July 201A
Relevant facts and circumstances
Your income for non-commercial loss purposes for the financial years 201A-1B to 202H-2I is more than $250,000.
You are carrying on a business (the activity) which commenced in the 201A-1B7 financial year.
You commenced your business in late 201A.
You had ordered and paid for trees from a specialist nursery which were than planted on your property in mid 201B.
A further number trees for planting in mid 201D have already been ordered.
The independent evidence you provided suggests that the commercially viable period for this industry is about six to seven years.
You state the business will make a profit in the 202H-2I financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 35-10(1)
Income Tax Assessment Act 1997 subsection 35-10(2)
Income Tax Assessment Act 1997 subsection 35-10(2E)
Income Tax Assessment Act 1997 paragraph 35-55(1)(c)
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
