Virtu Super

Location :

1454 Logan Road, Mount Gravatt, QLD, 4122
Added by Virtu Super, at 27 March 2025

Remember It’s Income, So Declare It
What many people are forgetting, however, is that there are tax implications when you earn spare cash through these apps; the ATO considers you are a contractor and you must pay your own income tax.

When you’re involved in the sharing economy, all the income earned from these activities must be included in your tax return, or you could face a hefty tax bill. The ATO has made it clear it’s keeping a close eye on people making money this way and is undertaking sophisticated analysis of tax returns and platform data to find tax dodgers.

Are You Running a Business?
If you provide goods or services for a fee, you need to determine whether the ATO considers you are involved in a business activity or a hobby. Generally, a hobby is a spare-time activity or pastime pursued for pleasure or recreation, while a business is run with the intention of making a profit. The ATO has online information to help taxpayers work out the difference.

If you provide goods or services through the sharing economy and it’s not a hobby, you need to keep records of all the income you earn. This must be declared in your tax return, along with any expenses you want to claim as a deduction, regardless of whether or not GST was paid on the amount.

Taxpayers also need to decide whether or not to register for GST. If you are carrying on an enterprise providing goods and services and earning more than $75,000 annually from your activities, it’s compulsory to register for GST and to obtain an Australian Business Number (ABN).

If you are providing goods and services across multiple websites or apps (for example, renting a parking space and doing odd jobs), you need to add the income from all these activities together. If the total turnover is, or is expected to be, $75,000 or more a year, you must get an ABN and register for GST. Income from renting out a room or your whole house or residential unit can be excluded, as GST is not applied to residential rentals.

Rules For Ride-Sourcing Services
When it comes to ride-sourcing services like Uber, the ATO has much stricter rules, as drivers are considered to be running a small business as a sole trader.

Drivers must apply for an ABN, register for GST and charge and account for GST, regardless of the amount they are making from the platform. They are also required to keep records of all income earned and declare it in their income tax return, together with any expenses being claimed as a deduction. Expenses can include insurance and registration costs, cleaning and car maintenance and repairs, but these need to be substantiated with receipts. Claims can only be made for the percentage of time the vehicle is used to earn income.

Renting Out Your Home
If you rent out all or part of your main residence using a sharing economy app you don’t need to apply for an ABN or register for GST, as GST does not apply to residential rents. However, all the rental income must be declared in your tax return.

When renting out a room or your home, you can claim expenses and depreciation on the property, but only for the period it was rented. Expenses can include mortgage interest payments, insurance, cleaning costs, utilities, council rates and depreciation of furniture. These costs must be apportioned according to the floor-area rented out, with a reasonable amount added for common areas. Expenses wholly associated with renting out the room, such as the app’s commission, are fully deductible.

Homeowners using the sharing economy to earn money from their home need to be aware this may affect their capital gains tax (CGT) obligations when they sell. Although CGT does not normally apply to a family home, if part of the house has been rented out, it’s treated differently by the ATO. The home may lose a proportion of its main residence exemption and some CGT may be payable.

To help taxpayers participating in the sharing economy understand their obligations, the ATO has detailed information on its website.

As the rules around tax and the sharing economy can be complex, please give us a call if you need guidance or more information about your tax and recordkeeping obligations.

Case Study
Patrick is an electrician and is registered for GST. He also owns a caravan he rents out through a campervan sharing website, as his family only uses the caravan during school holidays.

Patrick normally rents his caravan for $1,500 a week through the website. Although he must include this income in his annual income tax return, he can claim allowable deductions against this income.

As Patrick is already registered for GST, supply of the caravan is subject to GST, even though he is only earning $18,000 a year from renting it. The GST amount included in the rental fee must be included in his regular BAS and paid quarterly.

On 27 June 2011 amendments to the rules surrounding Self-Managed Superannuation Funds investments in collectables received royal assent and were made law. These changes made investing into collectables in your SMSF a much more difficult and strenuous exercise than before, with new standards for record keeping, storage and insurance.
There was however a carve-out for assets which were held by SMSFs at 1 July 2011, which were not required to comply with the new regulations until 1 July 2016. The time has now come for these assets. If Trustees have not made arrangements for these assets to be held in accordance with the rules, then they will find themselves in breach as at 1 July 2016.

The laws have a broad scope, with section 62A of the Superannuation Industry (Supervision) Act 1993 ('SIS Act') including in the definition of collectables such things as artworks, antiques, memorabilia, wine, cars, and memberships of sporting or social clubs, among others.

The specifics relating to how the Fund must maintain an investment in collectables include:

Assets cannot be leased to a related party, which under the SIS Act can include a trustee, trustee’s spouse, related trust, related company, dependents, and many others.
Collectables cannot be stored in the private residence of a related party.
Use of the assets by related parties is not permitted.
The reasons for deciding on the storage of the asset must be documented.
Assets must be insured, unless the asset is a membership to a sporting or social club.
If the asset is later transferred to a related party, a qualified, independent valuer must provide a valuation of the market value of the asset.

The legislation was designed to stop SMSF trustees using their super funds to acquire assets that they could enjoy benefits from before retirement, which could breach the 'sole-purpose test'.

While it is still permissible to invest in collectable assets through an SMSF, these rules add layers of complexity into the process and make it crucial that trustees and advisors have a deep understanding of their obligations as penalties for breaching the provisions can be severe.

If you still have collectibles of this nature, or aren't sure if you've done all that is required please contact us to discuss your situation as soon as possible as 30 June is not far away!.

Australians love property and for the property owners among us, it’s been a nice feeling watching market values rise. It’s worth remembering though, the tax man could want a share if you sell.
Unless the property is your primary residence, you could find capital gains tax (CGT) taking a cut of your profits.

CGT applies to investment properties, holiday homes and even vacant land.

CGT is added to your tax bill in the financial year in which you sell an asset. It’s not a separate tax, but is part of normal income tax and is applied at your marginal rate in that particular tax year.
What is CGT?
CGT is added to your tax bill in the financial year in which you sell an asset. It’s not a separate tax, but is part of normal income tax and is applied at your marginal rate in that particular tax year.

The tax applies to any increase in the value of an asset between the time you buy and sell it. Although most personal assets are exempt from CGT, many property assets are liable.

Calculating the Cost
If a property is liable for CGT, the capital gain is determined by subtracting its ‘cost base’ from the sale price. The cost base is calculated as follows:

1604_AI_graphic_Tax-and-family-home
If you own the property for over 12 months, you receive a 50 per cent discount on the amount payable.

An important consideration is when the property was purchased, as assets bought before 20 September 1985 are usually exempt from CGT when they are sold.

CGT And The Family Home
When it comes to your 'main residence', CGT is generally not payable providing the home has not been used to produce assessable income (such as running a business or renting it out) and if the land is two hectares or less.

If you live in the residence but then choose to rent it out, you may be required to pay CGT on the periods when you were not the occupant. CGT is also payable if a family home is owned by a company or trust, or if the owner ceases being an Australian resident.

The ATO does not clearly define ‘main residence’, but it bases its assessment on a number of factors. For example, it looks at whether you and your family live in the dwelling and have your personal belongings there, if your mail is delivered there, whether you are registered to vote at the property’s address, or if you have phone, gas and electricity connected.

For your family home to remain exempt from CGT, you can only have one main residence at any time, unless you are in the process of selling your old home and buying a new one.

When this happens you are permitted a six-month period where you can own two homes, but the second property must become your new main residence. You must also have lived in your original home for at least three continuous months in the year before you sell, and it must not have been used to produce assessable income during that period.

If you purchased your home after 20 August 1996, to be entitled to a full exemption you must have lived in the house when it was first bought and not have rented it out prior to moving in. Otherwise, the ATO will consider you bought it purely as an investment to produce income.

The 6-Year Rule
Even if you do move out of your family home and choose to rent it, you could still be exempt from CGT under the Temporary Absence Rule. Under this rule you can leave for up to six years, rent it out and not be liable for CGT. However, you must move back in for three months prior to selling.

If you leave your home but do not rent it out, you can claim a CGT exemption for an indefinite period.

When you buy another property and move in, you can elect to keep your original home as your main residence, but your new dwelling will be subject to CGT.

Inheritance and Tax
Generally, CGT does not apply if you inherit a main residence and the property is sold less than two years after the owner dies. In some case, it’s possible to apply to the ATO for an extension to this two-year period.

Take the example of Penny. As an only child, Penny inherited sole ownership of her mother, Shirley’s home when she died.

Shirley had lived in the house with her husband for the entire period since they first bought it in 1950.

Although she loves the home, Penny plans to sell the vacant property as she already owns a house closer to her work. If she sells within two years of Shirley’s death, any profit from the sale will be exempt from CGT. If she fails to sell within two years, Penny could be liable for CGT on the increase in the property’s value from the time of her mother’s death.

CGT is a complex area of taxation law and is dependent on your individual circumstances. If you have any questions about how CGT applies to your family home or assets, please call our office to discuss your situation.

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