Private ruling: Hobby or business – buying and sell antiques and collectibles
Published: August 2018
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 February 2017

Ruling: Q1: Are you in the business of selling antiques and collectible items? | A1: No Whether a ‘business’ is being carried on depends on the large or general impression gained. No one indicator is decisive. The indicators must be considered in combination and as whole (Taxation Ruling TR 97/11). Due to the lack of time you spend each week, the minimal number of transactions, the lack of a business premises, and that you do not advertise, there is not a commercial feel to your activity. Based on the information you have provided we do not consider these activities to have the necessary characteristics of a business for taxation purposes. Therefore, any income you received in relation to this activity for the relevant and subsequent year will not be assessable under section 6-5 of the ITAA 1997 as ordinary income. In addition, any expenses that you incurred in relation to this activity will not be deductible under section 8-1 of the ITAA 1997. Future years Although you may describe your activity as a hobby, you can change from conducting an activity as a hobby to that of being in business and vice-versa over time, as your level of activity changes. Therefore you should evaluate you level of activity on a regular basis to see whether you are conducting a hobby or carrying on a business. You can request a further private binding ruling after the subsequent financial year if you are still unsure about the issue.

Relevant facts and circumstances: You have a full time job, unrelated to your activity. You have started investing in collectible items for enjoyment, and so that you do not have all of your savings in shares. You only buy items you like, mostly at auctions every now and then. The exception to that in terms of scale was a large collection of items that was purchased in stages.