Private ruling: Are you carrying on a business
Date of advice: 7 November 2025
Published: 22 December 2025
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the business structure carrying on a business of letting rental properties? | A1: Yes. Based on the information provided, the activities undertaken by the business structure satisfy the definition of a 'business' as outlined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). Furthermore, it meets the relevant indicators set out in Taxation Ruling TR 97/11: Income Tax - Am I carrying on a business of primary production? Considering the circumstances, we are of the view that the rental activities the business structure is undertaking constitute the carrying on of a business.

Relevant facts and circumstances: You and your spouse established a business structure many years ago, which was used for another business activity until operations ceased around a decade ago. Relevant rental activities were previously reported as passive investments by you and your spouse. The business structure has lodged private ruling applications to confirm whether it has been carrying on a business of letting rental properties. This is due to legislative changes implemented in recent years. Over an extended period, you and your spouse jointly acquired several parcels of land, on which a number of properties were constructed. All properties are currently leased and will continue to be leased on fixed rental terms during the relevant ruling periods. Details of these properties including purchase dates and prices, addresses, first dates available for rent, and current market values have been provided. Both of you and your spouse are actively and exclusively involved in letting and managing the properties under the business structure. Details of maintenance and management tasks, including annual hours spent by both of you on these properties, have also been provided. Aside from rental income, neither you nor your spouse have any other sources of income during the relevant ruling years. A financial forecast has been provided for the rental properties relevant to the ruling periods. You anticipate that these properties will continue to generate profits, despite increased maintenance requirements due to their age. You do not intend to renovate, redevelop, or change the use of any of these properties, and do not intend on selling any of these properties during the ruling periods.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 995-1(1)