Private ruling: Am I in business - stamp collection
Date of advice: 19 February 2026
Published: 7 April 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the proceeds you receive from selling stamps assessable as business income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. | Q2: Are the stamps collectables as defined in subsection 108-10(2) of the ITAA 1997? | A2: Yes. | Q3: If the stamps are collectables, are stamps with a cost base less than $500 disregarded under section 118-10 of the ITAA 1997? | A3: Yes, provided the stamp is not part of a set that has been intentionally split into multiple transactions to obtain the exemption. | Q4: Are the stamps considered personal use assets under subsection 108-20(2) of the ITAA 1997? | A4: No. | Q5: If the stamps are personal use assets, if the cost base is less than $10,000 can they be disregarded for capital gains in accordance with subsection 118-10(3) of the ITAA 1997? | A5: Not applicable.

Relevant facts and circumstances: You have a long-term interest in collecting stamps. You are retired and spend time on collecting stamps and reselling the unwanted stamps. You purchase stamps with the focus of adding to and building your stamp collection. Your time participating in this activity varies week by week. You purchase and sell stamps online. You generally purchase a large number of mixed stamps and keep the stamps suitable for your personal collection and sell the unwanted stamps, some of the unwanted stamps are unsalable and are disposed of where they cannot be given away. You incur selling costs including advertising and postage fees. Your intent is to sell the stamps to cover these costs and to contribute to covering the initial purchase price. You do not keep extensive records. The estimate based on your annual profits and loss that you are unlikely to break even. You do not rely on the funds to live on; you sustain yourself on an aged pension. You have no business plan.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 subsection 108-10(2) | Income Tax Assessment Act 1997 paragraph 108-20(2)(a) | Income Tax Assessment Act 1997 subsection 18-15(1) | Income Tax Assessment Act 1997 subsection 118-15(2) | Income Tax Assessment Act 1997 subsection 118-10(1) | Income Tax Assessment Act 1997 subsection 118-10(3) | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: Ordinary income Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year. Ordinary income has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business. Carrying on a business Section 995-1 of the ITAA 1997 defines 'business' as 'including any profession, trade, employment, vocation or calling, but not occupation as an employee'. The case of Evans v. Federal Commissioner of Taxation 89 ACT 4540; (1989) 20 ATR 922 stated that whether or not an activity amounts to carrying on business for taxation purposes is a question of fact. There is no exhaustive or determinative definition which can be applied to determine this matter. Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? provides the Commissioner's view of the factors that are considered important in determining if you are in business for tax purposes. While you are not involved in primary production, the factors remain relevant in your circumstances. The factors are: • whether the activity has a significant commercial purpose or character • whether the taxpayer has more than just an intention to engage in business • whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity • whether there is regularity and repetition of the activity • whether the activity is of the same kind and carried on in a similar manner to that of ordinary trade in that line of business • whether the activity is planned, organised and carried on in a businesslike manner such that it is described as making a profit • the size, scale and permanency of the activity, and • whether the activity is better described as a hobby, a form of recreation or sporting activity. No one indicator is decisive. The indicators must be considered in combination and as a whole. Whether a 'business' is carried on depends on the large or general impression gained. | Detailed Reasoning - Does the taxpayer have more than an more intention to engage in business and is there activity?: No. Your actions do not show any intent beyond a hobby level. The activity undertaken is limited and more consistent with a personal interest rather than a commercial purpose. | Detailed Reasoning - Does the activity have a purpose and prospect of profit?: No. You have stated that you are not pursuing the activity to make a profit. There is no commercial intention, and you have also indicated that you are unlikely to break even on your activities. | Detailed Reasoning - Is the activity regular and repeated?: No. The activity is not carried out with the regularity or repetition typically associated with a business. Although you sometimes spent a substantial amount of time on the activity, there were also periods when you did not engage in it at all. | Detailed Reasoning - Is the activity systematic, organised and carried out in a business-like manner?: No. The activity is not conducted in a structured or organised manner, and you do not maintain any business-like systems, records, or planning. You do not keep independent records of sales or prepare profit and loss statements, instead relying solely on your online sales platform records. | Detailed Reasoning - Does the activity have a significant commercial purpose or character?: No. The activity lacks any commercial character. You do not promote or operate the activity in a way that indicates commercial intent. It is undertaken for personal enjoyment. | Detailed Reasoning - Size and scale, including capital invested in the activity?: No. The activity is small in scale, and the capital involved comes from personal acquisitions accumulated over your lifetime, rather than any commercial investment. | Detailed Reasoning - The activity cannot be described as a hobby, a form of recreation or a sporting activity?: No. The activity can be accurately described as a hobby or recreational undertaking. While similar activities may be carried on as businesses, that is not the case here, as reflected your circumstances. | Detailed Reasoning - Is the activity of the same kind that is carried on in a similar manner to that or ordinary trade in that line of business?: No. The activity is not carried out in a way that resembles how businesses in that field operate. It does not have the scale, systems, or approach you would expect from ordinary commercial activity. This supports the view that the activity is a hobby. | Detailed Reasoning - Conclusion: Based on the above factors, the Commissioner's view is that you were not carrying on a business of stamp collection. The information provided shows that you had no intention of operating a business and the activity was undertaken purely for recreational purposes. | Detailed Reasoning - Question 2: Are the stamps collectables as defined in subsection 108-10(2) of the ITAA 1997? | Summary: Yes. The stamps you collect are defined as a collectable under section 108-10 of the ITAA 1997. | Detailed Reasoning - Detailed Reasoning: A CGT asset is defined in section 108-5 of the ITAA 1997 and includes any kind of property or a legal or equitable right that is not property. CGT assets fall into one of three categories: • collectables • personal use assets, or • other assets. All assets are subject to the CGT rules unless they are specifically excluded. Capital assets acquired before 20 September 1985 are disregarded for CGT purposes. Collectables A collectable is defined in subsection 108-10(2) of the ITAA 1997 and is (a) artwork, jewellery, an antique, or a coin or medallion; or (b) a rare folio, manuscript or book; or (c) a postage stamp or first day cover; that is used or kept mainly for your personal use or enjoyment. In this case, a postage stamp is specifically defined as a collectable under paragraph 108-10(2)(c) of the ITAA 1997, consequently, your stamps are a collectable. | Detailed Reasoning - Conclusion: Yes, a postage stamp is specifically identified as a collectable under subsection 108-10(2)(c) of the ITAA 1997. As such, your stamps fall within the category of collectables for CGT purposes. They are therefore subject to the CGT rules that apply to collectables, unless otherwise excluded. | Detailed Reasoning - Question 3: If the stamps are collectables, are stamps with a cost base less than $500 disregarded under section 118-10 of the ITAA 1997? | Summary: Yes, this exemption does not apply to items that form part of a set acquired for more than $500, but any gain on individual stamps with a genuine cost base of $500 or less is disregarded. | Detailed Reasoning - Detailed Reasoning: Subsection 118-10(1) of the ITAA 1997 provides that a capital gain or capital loss you make from a collectible is disregarded if the first element of its cost base, or the first element of its cost if it is a depreciating asset, is $500 or less. However, subsections 118-15(1) and 118-15(2) of the ITAA 1997 apply where you own collectibles that form a set and would ordinarily be disposed of as a set, but you dispose of them in one or more transactions for the purpose of obtaining the exemption under section 118-10 of the ITAA 1997. In such circumstances: • The set of collectibles is taken to be a single collectible; • Each disposal is treated as a disposal of part of that collectible; and • You will not obtain the exemption under section 118-10 because the set was acquired for more than $500. Accordingly, any capital gain made on stamps that have not been separated from a set and that do not individually have a cost base of $500 or less is not disregarded under section 118-10. | Detailed Reasoning - Conclusion: Yes, any gain on individual stamps that genuinely cost $500 or less is disregarded for CGT purposes. However, this exemption does not apply to stamps that form part of a set acquired for more than $500, as the set is treated as a single collectable under subsections 118-15(1) and 118-15(2). | Detailed Reasoning - Question 4: Are the stamps considered personal use assets under subsection 108-20(2) of the ITAA 1997? | Summary: No, the stamps are not personal use assets, as they are defined as collectables under subsection 108-10(2) of the ITAA 1997; therefore, subsection 108-20(2) does not apply. | Detailed Reasoning - Detailed Reasoning: Subparagraph 108-20(2)(a) of the ITAA1997 provides that a personal use asset is a CGT asset (except for a collectable) that is used or kept mainly for your personal use or enjoyment, or that of your associate. As outlined question 2 above, the stamp collection is defined as a collectable under subsection 108-10(2) of the ITAA 1997. Consequently, the stamps are a collectable, and not a personal use asset under subsection 108-20(2) of the ITAA 1997. | Detailed Reasoning - Conclusion: No, they are not personal use assets, so subsection 108-20(2) does not apply. | Detailed Reasoning - Question 5: If the stamps are personal use assets, if the cost base is less than $10,000 can they be disregarded for capital gains in accordance with subsection 118-10(3) of the ITAA 1997? | Detailed Reasoning - Conclusion: As outlined in question 4, the stamps are collectables and not personal use assets. Consequently, subsection 118-10(3) of the ITAA 1997 is not applicable to any capital gain made in respect to the stamps.