The person or people who own or lease the asset, regardless of who is registered on the online marketplace, declares the income in their tax return.
You must declare the income even if it is small or is done only to supplement your income from a job or business activities.
If you own an asset jointly with another person, you must declare your income and expenses in proportion to your share of the asset.
Claiming business expenses
To claim a deduction for asset-sharing expenses:
- you must have spent the money yourself and have not been reimbursed
- it must relate directly to asset-sharing income
- you must have records to support the claims.
Expenses can sometimes be for both income-earning use and for private use when sharing your assets. You can only claim a deduction for the income-earning part of the expense. You need to work out the amount of your income-earning use and use that amount to work out how much of your expenses you can claim.
Some service fees or commission charged by an asset-sharing platform may be claimed as a deduction in full, depending on the nature of the fees and charges.
Some common examples of expenses for sharing assets include:
- maintenance or servicing of the asset
- depreciation
- insurance
- registration (for example, for cars, caravans/RVs or boats).
Working out the business part of an expense
When claiming the income-earning use part of an expense as a deduction, you need to be able to show how you calculated the amount. Common ways to show how you split expenses include:
- keeping diary entries of specific usage throughout the year
- claiming expenses from an itemised bill.
Filing your income tax return
If you earn income from sharing assets, you need to include this income and the deductions in your income tax return.
If you own the asset jointly with another person, each person needs to separately declare the income and expenses related to their share of the asset.
Individual income tax return - IR3
Record keeping
As well as the usual records, you will need to keep records such as:
- statements showing your income from the online marketplaces you are using
- receipts for any expenses you want to claim deductions for.
Records for business expenses can be kept in hard copy or electronically. All records need to be kept for 7 years after filing your income tax return.