One must first meet the income requirement before you can use one of the four tests to pass the non-commercial loss rules. If you subsequently pass one of the four tests, you can deduct your loss.

There are changes to the non-commercial loss rules that apply for the 2009–10 and later income years.

The key changes include:

  • the introduction of an income requirement to further restrict the circumstances under which a business loss can offset other income
  • a new exception for business losses that are solely caused by deductions claimed for the small business and general business tax break
  • a new Commissioner’s discretion for individuals who do not meet the income requirement but whose business activity is subject to a lead time
  • ensuring existing Commissioner’s discretions continue to apply.