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Edited version of private advice
Authorisation Number: 1052342474466
Date of advice: 19 December 2024
Ruling
Subject: Non-commercial losses
Question 1
Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 2022-23 and 2023-24 financial years?
Answer 1
Yes.
It is accepted that your business activity was affected by special circumstances outside your control and that these special circumstances prevented you from making a profit. Consequently, the Commissioner will exercise his discretion in the 20XX-XX and 20XX-XX financial years to allow you to include any losses from your business activity in the calculation of your taxable income.
This ruling applies for the following periods:
Year ended XX June 20XX
Year ended XX June 20XX
The scheme commenced on:
XX July 20XX
Relevant facts and circumstances
Your income for non-commercial loss purposes for the relevant years is more than $XX.
You have purchased an agricultural primary production operation in the 20XX-XX financial year.
The plan for the operation was to develop resources to be sold.
You also planned to further develop additional resources.
In mid-20XX the property and surrounding area was affected by severe weather disaster. This greatly impacted the production of resources, due to be sold for the 20XX-XX financial year.
Overall, the 20XX resources produced significantly less due to the impact of the natural disaster and sold for less than previous predications within the 20XX-XX financial year.
For the 20XX season a smaller production was planned. There was no resource production income in the 20XX-XX 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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