| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1051617939959
Date of advice: 11 December 2019
Ruling
Subject: Non-commercial Losses - Special Circumstances - Drought
Question
Will the Commissioner exercise the discretion to allow you to include any losses from your 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 the 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 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 operate a primary production business activity which commenced in 199X. You grow crops.
Previously, approximately X hectares of the land are used in the business to produce the crops. Planting commences in X with the harvest occurring once a year.
You have been impacted by a significant reduction in rainfall from January 2018 to May 2018. June 2018 saw the soil moisture to be non-existent and weed germination poor. Therefore the X hectares were not able to sown due to the drought conditions; as a result the annual harvest in December 2018 did not occur which resulted in no harvest occurring in the 2018-19 financial year.
The region was listed as a drought affected council in October 2018.
Historically you have met the requirements of the assessable income test.
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)