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Edited version of private advice
Authorisation Number: 1051610911713
Date of advice: 21 November 2019
Ruling
Subject: Non-commercial losses
Question
Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business in the calculation of your taxable income for the 2018-19 financial year?
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:
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997.
You purchased farming land and commenced a business of primary production in the 2018-19 financial year.
In your industry it is two years before the activity becomes commercially viable.
You would have met the assessable income test in the 2018-19 financial year if you had acquired the land sooner.
You have provided financial projections that show that the assessable income test is expected to be met in the 2019-20 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)