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Edited version of private advice
Authorisation Number: 1051957866753
Date of advice: 16 March 2022
Ruling
Subject: NCL - Commissioner's discretion - special circumstances - primary production
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX and 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 from making a tax profit. Consequently, the Commissioner will exercise his discretion in the XXXX and XXXX financial years.
This ruling applies for the following period:
XXXX
The scheme commences on:
XXXX
Relevant facts and circumstances
Your income for non-commercial loss purposes is less than $250,000.
XXXX and XXXX purchased a farm property, with a settlement date of XXXX.
The property has an XXXX farm with XXXX mature trees on approximately XXXX acres of land.
Business activity commenced XXXX.
The farm is operated by XXXX, through a partnership of XXXX. There are XXXX employees.
The produce is sold through local retailers.
Shortly after acquiring the farm a severe natural event destroyed fruit and flowers affecting XXXX production for the XXXX financial years.
The previous owner generated XXXX sales of XXXX in XXXX and XXXX in XXXX financial years.
After the natural event your sales were XXXX.
From the XXXX financial year, it is projected that each XXXX tree will produce approximately XXXX at XXXX, which will provide annual sales of avocados of XXXX per 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 subsection 35-30
• Income Tax Assessment Act 1997 paragraph 35-55(1)(b)