Edited version of private advice

Authorisation Number: 1052344042671

Date of advice: 16 December 2024

Ruling

Subject: Business or Hobby

Question 1

Will the income you receive be assessable as business income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

No, your activities are considered to be a hobby.

We have weighed up the indicators of carrying on a business outline in document Income Tax: Am I carrying on a business of primary production? and have determined that you were not carrying on business during those years because your activities did not have a significant commercial purpose or profit intention, you did not intend to engage in business and your activities were not carried on in a businesslike manner.

Therefore, any income received from your activity is not assessable income under section 6-5 of the ITAA 1997 and you are not entitled to deduct any expenses incurred in earning these amounts.

This ruling applies for the following period:

Year ending XX June 20XX

The scheme commenced on:

XX July 20XX

Relevant facts and circumstances

You are an X.

You have not worked as a X since 20XX.

You started making resources in 20XX.

You intend to sell these online.

You also intend to offer some for free.

You use the resources for your own professional development.

You conduct the activities from your home.

You make the resources when you have the time, capacity, and inclination.

You spend XX hours a week when you have time throughout the year.

You would sell the resources for approximately XX.

You have not sold any from July 20XX to November 20XX.

You do not keep records of cost of production.

You do not have a separate business account.

You do not have an ABN.

You consider the activity to be hobby.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 8-1

Relevant ATO view

Taxation Ruling TR 97/11 Income Tax: Am I carrying on a business of primary production?