| Disclaimer This edited version has been archived due to the length of time since original publication.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 private advice
Authorisation Number: 1051590171086
Date of advice: 3 October 2019
Ruling
Subject: Non-commercial business losses and the Commissioner's discretion
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production business activity in your calculation of taxable income for the 20XX-XX financial year?
Answer
Yes. Having regard to your full circumstances, the Commissioner has granted his discretion as it is accepted there is a 'lead time' in the nature of your business activity and you will 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:
Financial year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a primary production business (the activity) primarily concerned with mixed livestock and annual crops.
You commenced the activity in partnership in the 20XX-XX financial year.
Due to the nature of your activity it incurred expenses in the 20XX-XX financial year; however no income was derived until the 20XX-XX financial year where it has made a tax profit.
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), and
Income Tax Assessment Act 1997 paragraph 35-55(1)(c).