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Edited version of private advice
Authorisation Number: 1051621802838
Date of advice: 18 December 2019
Ruling
Subject: Non-commercial losses, commissioner's discretion
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include the loss from your business in the calculation of your assessable income?
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 on our website ato.gov.au by searching quick code 'QC 33774'.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You satisfy the income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You are currently operating a business as a sole trader. You commenced your business activity on X November 20XX.
In the 20XX-XX financial year, your ill health reduced your capacity to work, resulting in a reduction in the assessable income received from your business.
Due to your illness your business did not meet one of the four tests. You have provided a profit and loss statement which shows that your business activity has previously met the assessable income test. Additionally, your business activity has also met the assessable income test in the 20YY-YY 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)(a)