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Sharing assets via digital platforms - when is it not a business?

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If someone shares assets via digital platforms such as Car Next Door, Spacer and Toolmates, under what circumstances would they not be considered to be carrying on a business? Is it simply whether the person has an ABN or not, or are there other considerations?

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Community Manager

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Hi @TaxNewb,

 

That's all good, I misread as well.

 

Being in the business of sharing assets via a digital platform would be setting up your own platform to share them by for example as opposed to sharing the assets you own via existing platforms.

 

Hope this helps to clear it up a bit Smiley Happy

 

Thanks, NateH

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Hi @TaxNewb,

 

As a starting point we have information about Are you in business? on our website. This page lists the various characteristics of a business as opposed to a hobby.

 

Once that has been determined we have some specific guidance on what tax obligations are necessary for people sharing assets via digital platforms.

 

Hope this helps! Thanks, NateH

 

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Sorry @NateATO, I don't think I was very clear with my question. I'm not wondering if asset sharing via digital platforms may be considered a hobby - presumably this would almost certainly never be the case?

I actually thought that the activity of earning income from sharing assets via digital platforms would almost certainly be considered to be carrying on a business, similar to providing ridesharing or delivery services via digital platforms. However, the income and deductions for asset sharing page says:

If you are carrying on a business of renting, leasing or sharing assets, what you need to report and how you lodge your annual tax return for your business depends on your type of business entity...If you're not an employee of the platform or carrying on a business, report any asset-sharing income as other income...Any deductions related to asset-sharing income should be included as other deductions.

So what I'm trying to understand is: In the context of sharing assets via digital platforms, under what circumstances would it be considered carrying on a business vs not carrying on a business (but still generating assessable income)? I don't understand how sharing a car on Car Next Door, for example, can be done in different ways for one to be considered carrying on a business and the other not.

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Most helpful response

Community Manager

Replies 2

Hi @TaxNewb,

 

That's all good, I misread as well.

 

Being in the business of sharing assets via a digital platform would be setting up your own platform to share them by for example as opposed to sharing the assets you own via existing platforms.

 

Hope this helps to clear it up a bit Smiley Happy

 

Thanks, NateH

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Thanks @NateATO, it does clear it up a bit. Can I just double check the following scenarios?

 

Scenario 1

I purchase a car to drive for Uber. I also decide to add a second income stream by sharing my car on Car Next Door. Is this a second business activity under my ABN and the income included as business income? Or is it not a business activity and the income included as other income?

 

Scenario 2

I acquire an inventory of assets for the primary purpose of generating income with the intention of making a profit by sharing/renting out the assets. I could market my assets on social media, Gumtree, etc or create my own website, but initially, I decide to list my assets on the relevant digital platforms instead. I may consider cutting out the 'middle-man' in the future. Is this considered running a business, or not?

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Hi @TaxNewb

 

Thanks for your reply.

 

With both scenarios, it ultimately comes back to the characteristics listed on the Are you in business? page. Both scenarios could be considered business activities.

 

If you want to discuss the scenarios in more detail, you can request an early engagement discussion. For more information about that, have a look at the early engagement for advice page on our website.

 

Hope this helps.

 

Thanks,

 

ChrisR