Newsletter
November 2014 Newsletter
Doctor obtains tax relief for olive-growing activities
A medical practitioner has been, in the main, successful before the Administrative Appeals Tribunal (AAT) in seeking to have losses from his olive growing activities deducted from his other assessable income. The taxpayer had carried on an olive growing and olive oil production business for 15 years.
The taxpayer had applied to the Tax Commissioner to be relieved from the “non-commercial loss provisions” under the tax law for the 2010 to 2014 income years, inclusive. Under those rules, unless he is granted relief, he has to wait until the olive oil business starts to generate profits before he can claim his losses. The Commissioner refused the taxpayer’s application.
The AAT held the Commissioner’s decision not to allow the taxpayer immediate access to his losses was not the correct or preferable decision. The AAT decided the taxpayer should be allowed the relief from the “non-commercial loss provisions” under the tax law for the 2010 to 2013 income years, but not the 2014 income year.
The AAT also made several recommendations to the Commissioner as a result of issues raised during the proceedings. These were that the Commissioner:
- considers the use of an alternative approved form for applications of this nature;
- ensures, as far as possible, that any alternative approved form:
- asks applicants to provide all the information the Commissioner considers necessary for a proper consideration of the application; and
- takes into account the legislative amendments enacted in 2009 (ie the income requirement which means that taxpayers with taxable income over $250,000 have to rely on the Commissioner’s discretion).
- provides additional guidance to the Commissioner’s officers.