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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private advice

Authorisation Number: 1051561703078

Date of advice: 7 August 2019

Ruling

Subject: Carrying on a business

Question

Are you carrying on a business of letting rental accommodation?

Answer

Yes. You meet the relevant factors contained in Taxation Ruling TR 97/11. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You have an ownership interest in nine rental properties.

You own most of the properties solely and some you own in partnership with a relative.

You manage all the activities pertaining to running the properties as rentals. You:

·  Source the tenants

·  Enter into rental agreements

·  Collect the rent

·  Do the repairs that do not require a licenced tradesperson

·  Do most of the cleaning and gardening

You estimate that you work 9am-5pm every day on the business.

You have daily administration tasks that you conduct every day including:

·  Checking bank statements

·  Paying council rates, water rates and strata levies

·  Updating tenant ledgers

·  Emailing ledgers to tenants

·  Issuing breach notices to tenants

·  Drafting entry notices

·  Undertaking three monthly inspections

·  Analysing market rentals and purchases

·  Transferring funds from tenants rental accounts to bill payments accounts

You complete the following daily maintenance duties:

·  Mail collection

·  Lawn mowing and gardening

·  Cleaning gutters

·  Garbage takeout & general cleaning of bins and common property areas

·  Supervision of trades person

You also have extra administration tasks which can vary:

·  Attending court when required

·  Interview prospective tenants

·  Complete reference checks on new tenants

You complete the following extra maintenance duties which can vary:

·  Painting

·  Basic carpentry

·  Installation of solar lights

·  Basic tilling and repairs

You have provided a brief business plan.

Your relative does not assist you in managing the properties. This includes the ones you purchased together.

You do not have a written partnership agreement with your relative in relation to the properties.

You do not have any other employment.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 995-1

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