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Edited version of private advice
Authorisation Number: 1052134050865
Date of advice: 13 July 2023
Ruling
Subject: Commissioner's discretion - losses from business activity
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) 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 2021- 22 financial year?
Answer
Yes.
Having regard to your full circumstances, it is accepted that it is the nature of the business activity that has prevented you from making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently, the Commissioner will exercise his discretion in the 2021- 22 financial year.
This ruling applies for the following period:
Year ended 30 June 2022
The scheme commenced on:
1 July 2021
Relevant facts and circumstances
You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a farming business.
You commenced business operations in the 2021- 22 financial year.
In 2021- 22 financial year, you purchased a number of livestock.
You made a loss in that financial year from the activity.
You have provided a profit and loss statement for the 2022-23 financial year, showing that you have made a profit, which would be within the commercially viable period for your industry.
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)(c)