| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051343894827
Date of advice: 27 February 2018
Ruling
Subject: The Commissioner’s discretion for non-commercial losses
Question
Will the Commissioner exercise the discretion under section 35-55 of the Income Tax Assessment Act 1997 (ITAA 1997) and allow you to include the losses from your grape growing and wine making business activity in the 20XX to 20XX financial years?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 35-55(1) of the ITAA 1997 for the 20XX to 20XX financial years. Further information on non-commercial losses can be found on our website ato.gov.au and entering Quick Code QC33774 into the search bar at the top right of the page.
This ruling applies for the following periods:
Financial year ending 30 June 20XX
Financial year ending 30 June 20XX
Financial year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are currently employed.
You meet the income requirement under subsection 35-10(2E) of the ITAA 1997.
In financial year 20XX you purchased a property with the intention to produce wine.
You planted wine grape vines in financial year 20XX.
Your first harvest of wine grapes occurred in financial year 20XX.
You produced wine.
It takes between 12 and 18 months for the wine in the barrels to mature to a point that it can be sold by way of wholesale or through the cellar door.
The barrelled wine will produce wine for sale.
You project a harvest of grapes in financial year 20XX.
You project a harvest of grapes in financial year 20XX.
You plan to use all of the grapes produced on the property in your wine making business activity.
You will commence selling wine from the cellar door in the 20XX financial year when the first grapes harvested in 20XX will be in a saleable state as wine.
The wine making business activity has not produced assessable income greater than allowable deductions in three of the last five financial years (including the current financial year).
You project that you will produce assessable income greater than the allowable deductions in 20XX financial year.
You project that you will meet or exceed the assessable income test in the 20XX financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 35-10
Income Tax Assessment Act 1997 section 35-30
Income Tax Assessment Act 1997 section 35-35
Income Tax Assessment Act 1997 section 35-40
Income Tax Assessment Act 1997 section 35-45
Income Tax Assessment Act 1997 section 35-55