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Edited version of your written advice
Authorisation Number: 1051298508916
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You cannot rely on this edited version in your tax affairs. You can only rely on the advice that we have given to you or to someone acting on your behalf.
The advice in the Register has been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict ATO policy or decisions.
Date of advice: 23 October 2017
Ruling
Subject: Non-commercial business losses and the Commissioner's discretion
Question 1
Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production business activity in your calculation of taxable income for the 2016-17 to 2018-19 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 for the 2016-17 to 2018-19 financial years.
This ruling applies for the following periods:
Year ending 30 June 2017
Year ending 30 June 2018
Year ending 30 June 2019
The scheme commences on:
1 July 2016
Relevant facts and circumstances
You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a business which commenced in the XXXX-XX financial year.
You began the activity by purchasing a number of trees in the XXXX-XX financial year, and plan to increase the stock to approximately XXX trees over time.
You advised that there is a lead time between buying the trees and growing periods before you can harvest them for sale. As such you expect the activity to incur losses for the 2016-17 to 2018-19 financial years, and become profitable in the 2019-20 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)(b)
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