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Edited version of private advice
Authorisation Number: 1051887978706
Date of advice: 20 August 2021
Ruling
Subject: Commissioner's discretion - non-commercial business loss
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 financial year?
Answer
Yes. Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control and that these prevented you meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 20XX financial year.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a XXXXX business
You commenced business operations in the XXXX financial year.
In the 20XX financial year the COVID19 pandemic impacted your business activity.
Your business was impacted in the following ways:
• The COVID19 pandemic prevented you from operating full hours for the business.
• Government imposed social distancing restrictions significantly impacted the business activity.
• Your business activity was impacted by mask requirements deterring potential customers.
You intend to make a profit and make over $XXX in assessable income in 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)