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Edited version of private advice
Authorisation Number: 1052220670737
Date of advice: 4 April 2024
Ruling
Subject: NCL discretion
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 20YY-YY to 20YY-YY financial years?
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 20YY-YY to 20YY-YY financial years.
This private ruling applies for the following periods:
1 July 20YY to 30 June 20YY.
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
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 vineyard and winery business. The vineyard spans an area of hectares, with a number of vines per hectare planted.
After several years of planning and preparation, you commenced business operations. A timeline of activities leading up to the planting of vines was provided.
Additional vine planting numbers, wine production and financial information were provided.
Sales are expected to commence prior to the end of the current financial year.
You have provided independent evidence that attests to a commercially viable period for your industry.
You have made a loss since the activity began but expect your business activity to make a profit in the financial year following the current one, 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)