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Edited version of private advice
Authorisation Number: 1052330948362
Date of advice: 12 December 2024
Ruling
Subject: Commissioner's discretion - income requirement not met
Question 1
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 2023-24 and 2024-25 financial years?
Answer 1
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 2023-24 and 2024-25 financial years.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commenced on:
1 July 20XX
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 purchased a property with the intention of running a farming business.
This property is in a prime growing area.
You have many years of experience and knowledge in your industry.
You commenced business operations in a particular financial year.
The business activity will make a tax profit within a period that is commercially viable for the industry.
Financial data and projections were provided.
You expect your business activity to make a profit in the 20XX-XX 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)(c)