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Edited version of private advice
Authorisation Number: 1052370541650
Date of advice: 3 April 2025
Ruling
Subject: Commissioner's discretion - 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 2023-24 financial year?
Answer 1
Yes.
Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control and that these prevented you from making a tax profit. Consequently, the Commissioner will exercise the discretion in the 2023-24 financial year.
This ruling applies for the following period:
1 July 2023 to 30 June 2024
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Your taxable income was less than $250,000.
You carry on a primary production business.
In the 2022-23 financial year your plan was to improve the land to support livestock.
In the 2023-24 financial year you purchased livestock for breeding and growing the livestock.
For a period, drought affected the profitability of your business activity. You provided evidence regarding the drought.
Your business was impacted in the following ways:
• a lack of fodder caused a reduction in the weight and condition of livestock, sales were not possible
• there were additional costs to keep the livestock fed.
You expect your business activity to pass the assessable income test in 2024-25 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)(a)
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