| Disclaimer This edited version has been archived due to the length of time since original publication.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 ruling
Authorisation Number: 1011624496501
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Assessable income
Question
Are the payments received from playing sport assessable income?
Answer
No.
This ruling applies for the following periods
Year ended 30 June 2010
Year ending 30 June 2011
The scheme commenced on
1 July 2009
Relevant facts
You work fulltime in a trade.
For fun and fitness, you recently started playing sport on the weekends at your local club.
The club pays players if the team wins.
You have been issued with a payment summary and have had tax withheld.
Relevant legislative provision
Income Tax Assessment Act 1997 Subsection 6-5(1)
Reasons for decision
Subsection 6-5(1) of the Income Tax Assessment Act 1997 provides that a taxpayer's assessable income includes income according to ordinary concepts.
Examples of receipts that would generally be considered income according to ordinary concepts would include salary and wages for services rendered by an employee, and sales from a business activity. They are receipts from an activity conducted for the purpose of gaining income. By way of contrast, receipts from the conduct of a pastime or hobby would not generally be considered income according to ordinary concepts.
Taxation Ruling TR 1999/17 outlines the Commissioner's view on the tax treatment of receipts and benefits obtained from involvement in sport. Paragraph 10 provides that where a person's involvement in sporting activities constitutes a pastime or hobby rather than an income-producing activity, money and other benefits received from the pursuit of that pastime or hobby are not assessable income, nor are expenses deductible.
In your case, you play sport for fun and fitness. The income that you earn from playing sport is not for regular expenditure and is not paid to provide financial support or relied upon for that purpose. sport is neither your principal income earning activity nor does it constitute a business activity. As such, it is accepted that your activity is in the nature of a hobby or pastime.
Therefore the income you received for playing sport is not considered assessable income.