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World's largest armies 1816 - 2020
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NSW support measures, plus update for payroll tax.
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Year-end tax planning
Home Office & end of 2021 tax year
ATO extends STP finalisation due date
Super transfer balance cap increase from 1 July 2021
ATO extends Division 7A COVID-19 relief
Tax implications - more than one job
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10% Super Guarantee from 1st July 2021
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Articles
Fringe Benefits Tax and Odometer Readings
Tax Office Interest Rates Released
Tax Office Warns of Email Scam
Wash Sales
CV (and other Employee) Fraud
Over $20,000 in Tax Last Year?  Lodging your 2007 Income Tax Return
The Real Cost of Fire!
Australians with Terminal Illness
Hobby or Recreation
Trademark Scams
Tax Changes Under Labor
Anti-Money Laundering
Child Care Benefit - Refunds Earlier
Hobby or Recreation
The pursuit of a hobby does not constitute the carrying on of a business for taxation purposes.  Money derived from the pursuit of a hobby is not regarded as income and therefore is not assessable.

Similarly, expenses incurred in relation to a hobby are not allowable as deductions.  In Ferguson's case, the Court said....

"if what he is doing is more properly described as the pursuit of a hobby or recreation or an addiction to a sport, he will not be held to be carrying on a business, even though his operations are fairly substantial'.

TR 97/11 states that the following factors will often indicate that an activity is a hobby:-

  • it is evident that the taxpayer does not intend to make a profit from the activity;
  • losses are incurred, because the activity is motivated by personal pleasure and not to make a profit and there is no plan in place to show how a profit can be made'
  • the transaction is isolated and there is no repetition o regularity of sales;
  • an activity is not carried on in the same manner as a normal, ordinary business activity;
  • the activity is carried on a small scale;
  • there is an intention by the taxpayer to carry on a hobby, a recreation or a sport rather than a business; and/or
  • any produce is sold to friends and relatives, and not to the public at large.

 

Note:  Because expenses incurred in carrying on a hobby are not deductible, such an activity cannot give rise to a tax loss.

 

 

 

 

 



7th-February-2008