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Edited version of your written advice

Authorisation Number: 1051356222655

Date of advice: 29 March 2018

Ruling

Subject: Non-commercial losses – fruits – under $250 000 income

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 lime and banana farming in the calculation of your taxable income for 20xx-xx to 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 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 20xx-xx to 20xx-xx financial years.

This ruling applies for the following periods:

The scheme commences on:

1 July 2017

Relevant facts and circumstances

You satisfy the income test in 35-10(2E) of the ITAA 1997.

Your business activity commenced in the 20xx-xx financial year.

You will be planting your product in June 20xx.

Grafted trees take x years to bear fruit and x years to reach commercial production.

You expect your business to make a profit within x-x years.

You provided projected income data indicating that you will satisfy the assessable income test in the 20xx-xx financial year.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 35-55

Income Tax Assessment Act 1997 section 35-30

Income Tax Assessment Act 1997 section 35-10(2E)

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