goldwright said:
mbasko said:
Unless your going to take out a 3 month mining lease then it's just a hobby & anything found is found as per a hobby so won't be taxable.
There is no register of full time prospectors & the only disclosure that may ever possibly be needed is if you have a major find & you also claim benefits/pension of some type.
The ATO will not even accept that your carrying out an activity for tax purposes unless you meet certain rules or criteria that would determine your running a business. If they decided every Tom, **** & Harry were fulltime prospectors carrying out a business they would have a hefty tax return bill.
Sorry mbasko, that is not true any deposit into a personal bank account over $10000 can and will grab the attention of the ATO. And if audited in the future if not claimed will incur tax, hobby or not. You are well within your right to register an ABN and run as a business and then claim all your detectors and equipment as a tax deduction. The ATO does not care how you make the money as long as you pay your tax. And they would only get a tax return if they already paid to much tax through PAYG.
Sorry but that's not true. An accountant has confirmed this & unless your carrying out a legitimate business with a minimum $20,000 turnover you cannot claim business losses against other income even if you have an ABN.
Putting more than $10,000 into the bank does not immediately grab ATO attention or a future tax bill. I have done this before with no ATO follow up & knowing full well that it is legitimate tax free money (not all gold but similar principles).
The ATO's own website states that you need to show that you are legitimately carrying out a business to claim expenses (having an ABN is only a part of this) & also
if deemed as a hobby you don't have any additional tax or reporting obligations.
I'd suggest if you are turning over more than $20,000 to keep a constant check of the rulings or make your accountant aware but currently everything points towards it being a hobby.
To be deemed a business the ATO use several indicators which as hobbyists we just don't meet for the most part.
It's a two way street i.e. they don't want profitable businesses claiming to be hobbys & not paying tax but they don't want hobbyists claiming expenses or business losses as a rort either. Believe me I would love for them to tell me that detecting gold is a business. My tax return would be magic.
Edit: Dont take my word for it. Do your own research & talk to your accountant - just make sure they fully understand exactly what/how/when/why your carrying out your hobby or pastime.
Taking time off to go prospecting in Victoria for 3 months wouldn't necessarily constitute running a business unless you want it to & you will most likely get the turnover i.e. proven mining lease.
Finding a nice nugget or 3 is handled no differently to winning money at the races or on lotto.
