Private ruling: Am I carrying on a business of letting rental properties?
Date of advice: 23 December 2021
Published: March 2022
Date scheme commenced: 1 July 20XX

Ruling: Q1: Am I carrying on the business of letting rental properties? | A1: Yes. This private ruling applies for the following period: Year ending 30 June 20XX

Relevant facts and circumstances: You own XX rural properties which are rented to Company A. You hold 100% of share capital in Company A who operate a farming enterprise on land owned by you and pay you commercial rent with GST. The total land leased to Company A by you is XXXha. Rent is approximately $XXX per year and the monthly rent received is based on market valuations by Elders Rural Services Australia Limited. The lands and residential residences are leased on commercial terms under the terms of formal leases. In addition to the rural lands and residences you also hold a residential property in XXXX NSW which is also rented. You have a business plan in place for this pursuit which outlines the land held; the business purpose of the land held and activities connected to improving the agricultural land. You provide facilities, lands and support to XXXX Holdings Pty Ltd necessary to conduct its grazing and farming operation. The activity is conducted with the intention of making a profit. This activity has always produced a profit over XX years. You also have wide commercial experience and detailed knowledge of grazing and farming requirements You hold a Bachelor of Industrial Engineering BE (Honours) and a Master of Business Administration (MBA) You were a Fellow of the Australian Institute of Management (FAIM) until 20XX You are a Fellow of the Australian Institute of Company Directors (FAICD) Separate invoices for rural and residential leases are produced each month for income tax and Business Activity Statement purposes, as well as the preparation of monthly management accounts.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 995-1