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Edited version of private advice
Authorisation Number: 1051889570993
Date of advice: 24 August 2021
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 to 20XX financial years?
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 to 20XX financial years.
This ruling applies for the following periods:
1 July 20XX to 30 June 20XX
1 July 20XX to 31 July 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 business
You commenced business operations in the XXXX financial year.
In the 20XX and 20XX financial years personal health issues and the COVID19 pandemic impacted your business activity.
Your business was impacted in the following ways:
• You were unable to perform the business activity due to your personal health issues.
• Your ability to perform the business activity was impacted due to your personal health issues.
• Lockdown measures as a result of the COVID19 pandemic forced your business to close for significant periods of time.
You intend to make a profitin the XXXX 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)