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Edited version of private advice
Authorisation Number: 1051524979901
Date of advice: 30 May 2019
Ruling
Subject: The Commissioner's discretion for non-commercial losses
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 the calculation of your taxable income for the 20XX financial years?
Answer
Yes.
Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which prevented you from passing a test. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You commenced carrying on a business in early 20XX.
You submit that you were affected by special circumstances in the 20XX-XX and 20XX-XXfinancial years, which had a direct effect on your ability to conduct your business activity as the sole operator.
You have provided supporting evidence to substantiate your claim.
As a result of the special circumstances you were no longer able to continue running your business activity, and as such you did not meet any of the four tests.
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)