Edited version of private advice

Authorisation Number: 1051691720983

Date of advice: 1 June 2020

Ruling

Subject: Non-commercial losses

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 any losses from your business activity in your calculation of taxable income for the 20XX-XX financial year?

Answer

Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances outside your control which caused you to make a loss. 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 20XX

The scheme commenced on

1 July 20XX

Relevant facts

You commenced your business activity, in 20XX.

Your profit and loss statement for the 20XX-XX financial year shows an overall loss of approximately $XXX.

Your intention was to commence the business earlier in the financial year.

Your business is situated in the initial stages of a new building development and there were delays with approvals due to the developer lodging all the approvals together for the whole development which is projected to take years to complete.

After extended negotiations, you were required to request separate temporary approval to be able to open and will have to do this every year until the development is completed.

The business activity produced a profit in its first 12 months of trading.

Your income for non-commercial loss purposes in the 20XX-XX financial year was above $XXX.

Relevant legislative provisions

Income Tax Assessment Act 1997 - section 35-1.

Income Tax Assessment Act 1997 - subsection 35-10(2E).

Income Tax Assessment Act 1997 - subsection 35-55(1)

Income Tax Assessment Act 1997 - paragraph 35-55(1)(a).