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Edited version of your written advice
Authorisation Number: 1051365238005
Date of advice: 24 April 2018
Ruling
Subject: Non-commercial losses and the Commissioner’s discretion.
Question
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 in your calculation of taxable income?
Answer
Yes.
Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control, and that this has prevented you meeting one of the four tests. Consequently the Commissioner will exercise his discretion
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
Relevant facts and circumstances
You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You are carrying on a business activity.
You have been affected by special circumstances which have impacted your ability to perform your business duties.
Due to limitations you have decided to explore other work available that you will be able to undertake. This will enable your business to produce assessable income.
You are currently on income protection.
Your insurer will be assisting you with returning to work.
As a result of the special circumstances, this has caused your business to fail the $20,000 assessable income test and your business activity has resulted in a loss for the XXXX-XX and XXXX-XX financial years.
You have provided figures that indicate that the business will be profitable in the XXXX-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)(a)