Edited version of private advice

Authorisation Number: 1051851829683

Date of advice: 17 June 2021

Ruling

Subject: Commissioner's discretion - non-commercial losses

Question

Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business in the calculation of your taxable income for the financial years ending 30 June 20XX and 20XX?

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 periods:

Financial year ending 30 June 20XX

Financial year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You and your partner have operated a primary production business since XX 20XX.

The business involved a mixed farming activities, which consists XX, as well as XX. Shortly after purchasing the property you commenced selling XX to XX.

On XX XX 20XX the farm was devasted by an extreme weather event which caused over $XX worth of property damage.

In addition to the property damage, this resulted in no produce for the expected harvest in XX 20XX.

Due to the significant damage to XX, it can take 2-3 years to regain XX, causing limited XX income for the financial years ending 30 June 20XX and 20XX.

Your income for non-commercial loss purposes did not exceed $XXX in the year ending 30 June 20XX. It is anticipated that the business will meet the assessable income test from the 20XX 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)