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Edited version of private advice
Authorisation Number: 1052082624020
Date of advice: 31 January 2023
Ruling
Subject: Commissioner's discretion - non-commercial loss
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-XX 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 from making a tax profit. Consequently, the Commissioner will exercise his discretion in the 20XX-XX 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
Your income for non-commercial loss purposes was more than $250,000 in the relevant year.
In a partnership, you operated a primary production business. This business had operated for many years.
Financial statements were provided.
Due to a serious medical condition your partner had to retire.
If it were not for the special extenuating circumstances, you would have met the real property test.
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)