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Edited version of private advice
Authorisation Number: 1051661070061
Date of advice: 23 April 2020
Ruling
Subject: Non-commercial losses - Lead Time
Question
Will the Commissioner exercise the discretion to allow you to include any losses from your business activity in the calculation of your taxable income for the 20XX-XX to 20XX-XX financial years?
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 periods:
Year ended 30 June 20XX to Year ending 30 June 20XX
The scheme commences on:
01 July 20XX
Relevant facts and circumstances
You satisfy the less than $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.
Your business activity is the production of specific nuts commencing in the 20XX-XX income year.
Accepted independent evidence supports the commercially viable period of eight years for your industry.
You project that your activity will meet the $20,000 assessable income test in the 20XX-XX financial year which is within the commercially viable period for your industry.
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)