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Edited version of private advice
Authorisation Number: 1051522521910
Date of advice: 28 May 2019
Ruling
Subject: Lead time
Question
Will the Commissioner exercise the discretion to allow you to include any losses from your forestry operation business in the calculation of your taxable income for the 20XX-XX to 20XX-XX financial years?
Answer
Yes.
Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted there is a 'lead time' in the nature of your business activity and you will pass a test or make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au
This ruling applies for the following period/s:
Year ending 30 June 20XX to Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You operate a forestry plantation business activity, specifically the cultivation and harvesting of standing hardwood timber.
You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997.
You have provided independent evidence that attests to a commercially viable period of XX to XX years for your industry and that it is expected that you will make a tax profit in the 20XX-XXfinancial year.
The business activity will not satisfy the assessable income test, profits test, real property test or other assets test in the years ruled for.
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)