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Edited version of private advice
Authorisation Number: 1051526636078
Date of advice: 5 June 2019
Ruling
Subject: Non-commercial business losses and the Commissioner's discretion
Question
Will the Commissioner exercise his discretion to allow you to include any losses from your primary production activity in the calculation of your taxable income for the 2018-19 to 2022-23 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 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 periods:
Financial year ending 30 June 2019
Financial year ending 30 June 2020
Financial year ending 30 June 2021
Financial year ending 30 June 2022
Financial year ending 30 June 2023
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997.
During the 2018-19 financial year you commenced a primary production activity (the activity).
During the 2018-19 you ordered X trees from a nursery to commence the activity. The trees will be delivered when they are one year old and will be planted during the 2019-20 financial year.
You have provided evidence that indicates that the first commercial harvest should be expected after approximately 5 years.
You expect the activity to earn more than $20,000 in assessable income in the 2023-24 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)(b)