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Earning income from the sharing economy

The holiday season is a peak time for activities in the sharing economy to increase. During this time those participating in the sharing economy must not forget their tax obligations.

The most common sharing economy activities around the festive season include:
– Providing ride-sourcing services for a fare.
– Completing jobs or errands for payment.
– Renting out a room or a whole house or unit.
– Renting out a vehicle or a car parking space.

Depending on the activity, the tax obligations vary. The ATO is reminding those that participate in the sharing economy to consider the following:
– declaring income in their tax return
– what income tax deductions and GST credits they can claim for expenses related to earning income and what they can’t claim because of personal use
– how all of their sharing economy earnings added together affect their income tax and GST obligations
– keeping records of their income and expenses to meet their tax obligations

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Investing in shares vs property in SMSFs

March 19, 2020

Shares and property are two popular investment options for those with a self-managed super fund (SMSF). However, they both have very different attributes and choosing the one that will achieve the best outcome for an SMSF depends on your personal goals and situation.

While the price of shares can vary drastically, property is a relatively stable asset, making it appealing to those who want more security and predictability. Property prices are also negotiable unlike shares, and you can generally borrow money at a lower rate for property purchases.

It may seem hard to find the perfect investment property, but older and undercapitalised properties can be renovated for profit. However, returns from property rentals can be dented due to factors such as land tax, utilities and rates, maintenance and tenancy vacancies.

Shares are more dynamic and volatile than property. One advantage is the accessibility of investing in shares, as you can enter the share market with a few thousand dollars – much less than what you need to invest in a property.

Maintaining a portfolio of quality shares that pay tax-effective dividends may be a good way to fund retirement. With the right portfolio allocation, shares also have the potential to provide a better, stronger income than property rentals, as long as that income is sustainable and increasing.

Property can generally be used as a wealth-creation tool, while shares can create a reliable retirement income. For those who can afford to put more money into investments, it may be a good idea to consider investing and diversifying in both. If you’re unsure about which investment option is right for you, seeking financial advice may be the best option.