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Edited version of private advice
Authorisation Number: 5010094455591
Date of advice: 17 October 2023
Ruling
Subject: Commissioner's discretion - lead time
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) 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 one of the four tests being passed. It is also accepted that you will pass one of the four tests or 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 private ruling applies for the following period:
Year ended 30 June 2022
The scheme commenced on:
1 July 2021
Relevant facts and circumstances
You satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a breeding business.
You have advised the duration of the lead time required for your industry.
You engage in other full-time employment. Outside of your employment you spend time on this activity.
You maintain a manual record keeping system.
You advertise, have a website and a Facebook page.
You expect your business activity to produce at least $XX assessable income in a future financial year.
You plan for your business to become a full-time occupation in the future.
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)(b)