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Edited version of your written advice
Authorisation Number: 1051355935640
Date of advice: 29 March 2018
Ruling
Subject: Non-commercial losses – lead time – primary production.
Question
Will the Commissioner exercise the discretion in subparagraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include losses from your business activity of primary production farming in the calculation of your taxable income for 20XX-XX and 20XX-XX 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 20XX-XX and 20XX-XX financial years.
This ruling applies for the following period:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You jointly purchased a farm in 20XX.
You planted primary production seeds in September 20XX because there were no crop stools available at the time of purchase.
You planted XX hectares with primary production crop in 20XX.
You will commence harvesting your primary production crop in June or July 20XX.
You expect to make a profit in the 20XX income year. Further you expect to pass the assessable income test in the same 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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