Edited version of private advice

Authorisation Number: 5010074034898

Date of advice: 8 June 2021

Ruling

Subject: Business - income / special professionals

Question 1:

Are you considered to be a special professional for the purposes of the concessional tax treatment under Division 405 of the Income Tax Assessment Act 1997 (ITAA 1997) for the 2019-20 financial year in relation to your photo and video activity?'

Answer

Yes

Question 2

Are you considered to be a special professional for the purposes of the concessional tax treatment under Division 405 of the ITAA 1997 for the 2019-20 financial year in relation to your performing in the band activity?'

Answer

Yes

Question 3

Are you considered to be a special professional for the purposes of the concessional tax treatment under Division 405 of the ITAA 1997 for the 2019-20 financial year in relation to your appearing in podcasts activity?

Answer

Yes

Question 4

Are you considered to be a special professional for the purposes of the concessional tax treatment under Division 405 of the ITAA 1997 for the 2019-20 financial year in relation to your modelling activity?'

Answer

Yes

Reasons for decision

Income averaging for special professionals

Section 405-25 of the ITAA 1997 can apply to individuals who earn income as a performing artist or production associate. A special professional is defined in subsection 405-25(1) of the ITAA 1997 and includes a performing artist or production associate.

Section 405-25(3) of the ITAA 1997 provides that a performing artist includes someone who performs or appears in or on a film. Film is defined in subsection 995-1(1) of the ITAA 1997 as an aggregate of images, or of images and sounds, embodied in any material. This definition is wide enough to capture website platform videos.

Based on a consideration of the whole arrangement, it is accepted that your activities fall within the definition of a special professional for averaging purposes. You are eligible for special professional income averaging (a concessional tax treatment) if:

•         you are an individual who is an Australian resident at any time during the income year

•         you are a special professional, and

•         you satisfy the first-year requirements (see below) in either the current income year or an earlier income year.

The first year you are eligible for special professional income averaging is the first income year for which the taxable professional income (TPI) you earned as a resident special professional individual is more than $2,500. This is known as year 1.

This ruling applies for the following period:

1 July XXXX to 30 June XXXX

The scheme commences on:

XXXX

Relevant facts and circumstances

You were an Australian resident for tax purposes during the XXXX financial year.

You are engaged in multiple creative work activities which provide you with an income stream.

There is no business plan.

You design, film, feature in, script and edit the videos and photos yourself. You also host and participate in pod casts; you are an active band member and participate in modelling events.

You perform in the presence of an audience on website platforms and in real time.

There are regular fluctuations to the income you receive. You earned more than $2,500 as a special professional individual in the XXXX financial year.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 Division 405

Income Tax Assessment Act 1997 subsection 405-25(1)

Income Tax Assessment Act 1997 subsection 405-25(2)

Income Tax Assessment Act 1997 subsection 405-25(3)

Income Tax Assessment Act 1997 subsection 405-25(4)

Income Tax Assessment Act 1997 subsection 405-25(5)