Edited version of private advice

Authorisation Number: 1051738300752

Date of advice: 12 August 2020

Ruling

Subject: Commissioner's discretion for non-commercial losses

Question

Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business activity in the calculation of your taxable income for the 20XX to 20XX 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 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:

1 July 20XX

Relevant facts and circumstances

You do not satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997.

You have purchased a property on which you have commenced a primary production activity.

The plants require several years before they reach maturity.

You have provided your business plan and supporting evidence of the commercially viable period for the industry.

You project that your activity will produce assessable income greater than the allowable deductions for the activity in the 20XX financial year, which is within the commercially viable period.

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)(c)