| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1051609120964
Date of advice: 15 November 2019
Ruling
Subject: Non-commercial losses - professional arts business exception
Question
Can your business loss be offset against your other assessable income by virtue of the professional arts business exception contained in subsection 35-10(4) of the Income Tax Assessment Act 1997?
Answer
Yes.
Paragraph 89 of Taxation ruling TR 2001/14 provides that subsection 35-10(4) of the Income Tax Assessment Act 1997 contains an exception for primary production businesses or professional arts businesses that are carried on by certain individuals, where they have less than $40,000 of assessable income (excluding any net capital gain), from sources not related to their primary production business or professional arts business.
Paragraph 90A of TR 2001/14 provides that when determining if the exception applies it is necessary to ascertain whether the individual's assessable income from sources that do not relate to the primary production business activity or professional arts business activity is less than $40,000. Consequently this also means that if the individual derives assessable income from other sources that do relate to that business activity, it will not be taken into account in determining if the $40,000 threshold is met.
Having considered your overall circumstances we can confirm that the income you derived as a performing artist has a sufficient enough connection to your business activity to enable this income to not be taken into account in determining if the $40,000 threshold is met.
As such and based on the information you have supplied to us, you will meet the requirements of the professional arts business exception contained in subsection 35-10(4) of the Income Tax Assessment Act 1997, which will enable you to offset your business losses against your other income.
This ruling applies for the following period:
Year ended 30 June 2018
The scheme commenced on:
1 July 2017
Relevant facts and circumstances
You carry on a business in the performing arts industry, which involves the production of stage performances.
You also earn employment income connected with stage production.
You earned over $40,000 in assessable income from your employment income from your involvement in stage production.
You incurred a loss from your business activity.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 35-10(4)