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Edited version of private advice
Authorisation Number: 1051759083865
Date of advice: 06 October 2020
Ruling
Subject: Non-commercial losses - Commissioner's discretion special circumstances
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 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 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 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 ITAA 1997.
You identified a suitable building to conduct your business activity from and commenced renting the property as of the XX January 20XX.
You had building contacts to ensure the building was suitable for your business activity with completion dates prior to the XX April 20XX to facilitate the commencement of business activity.
You projected your income for the 20XX-XX financial year would be greater than $20,000 if you had operated for the full income year.
Your actual income received was severely impacted due to extraordinary circumstances which caused you to have to delay the commencement of your business activity.
When the impact of the extraordinary circumstances eased such that you were able to commence trading, you achieved sales of income greater than $20,000 in the first full month of operation.
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 subsection 35-30(b)
Income Tax Assessment Act 1997 paragraph 35-55(1)(a)