Full time fossicking and tax

[Shep]

I am considering taking a year off and looking for gold full time.
How do people handle tax etc as it would be hard to claim that its the product of a hobby if its the only income?

I have had a brilliant year finding gold and work is getting in the way of my fossicking.

 

[goody2shoes]

Would love to be coming with you...

Being a hobby I don't think you have to pay tax ...

But I may be wrong..

Goody

 

[Northeast]

Would probably depend on if you wanted to claim expenses such as fuel, new gear, depreciation, accomodation if staying somewhere, purchase of safety equipment, etc.

If not claiming anything I would think you could go tax free?

 

[davsgold]

Well you can't have a "Full time" hobby, as a hobby is something you do in your spare time and it fits in around your other work/job. And it is hardly "Fosicking" if your doing it full time, it would be called "Prospecting" ickshovel:

I you are doing something full time like detecting/prospecting then they will class it as your job, and gold you sell is your income then, as so you might as well be claiming all expenses, for as we know it is very expensive this detecting for gold.

cheers dave

 

[Greenhornet_au]

Question is.... will you find enough to convert into enough cash, to meet the minimum tax thresh-hold.

Then you could even hold onto enough as gold and store it, to provide an umbrella for those times
when you dont find enough "income" or to maximize your return as the gold price varies.

Honey farmers, farmers and scrap metal dealers are just a few that do this all the time.

Best of luck and hope you find a huge nugget.

 

[Phoenix76]

G'day Shep

I have tax experience and suggest you need to get some good advice from a tax professional. I know you will cost you some dollars for the advice but in the long run I think it would be worth it.

As others suggest, if it is your only source of income then you are a prospector not a hobbyist. However, keep in mind the tax threshold which is around $18,500. This would be your income less expenses. If you don't reach that limit then you won't have a tax problem. And whilst I'm not personally up to speed on the ins and outs of mining in respect of taxation, I suggest there could be various allowances that might benefit you. This is why I suggest investing some dollars in getting good advice.

Shep, I would think long and hard on what you are thinking about. I know the lure of getting out there for a year and giving it a go is a huge temptation to many of us, but you need to understand the realities of what you are considering mate.

Get some professional advice, and if you decide to have a go, then I reckon everyone on this forum will be rooting for you to make a success.

Cheers
Bill

 

[Goldfreak]

I wish I found enough gold to feel guilty about not declaring it :lol:

 

[Deepseeker]

I'm afraid if I took a year off to prospect full time, this is the only "Tacks" they would be able to get out of me.... :lol: :lol: :lol: :lol:

 

[Ded Driver]

good one DS :goldnugget: :lol:

 

[Swinging & digging]

I'm afraid if I took a year off to prospect full time, this is the only "Tacks" they would be able to get out of me.... :lol: :lol: :lol: :lol:

https://www.prospectingaustralia.com/forum/img/member-images/13321/1573802181_tacks.jpg

Tacks? I don't find too many of those, but shot gun pellets are everywhere in the GT.

Tax on Gold Prospecting Full time.
Back in the mid 80s a gold tax was proposed and recreational prospectors were concerned about it?
Apart from the fact despite you having a good year finding gold it is very difficult to make a living out of it.

I think the ATO looked into recreational Prospectors and tax a few times, and there was a fear that Prospectors would
claim expenses against their finds, for the most part many would have made a paper loss so the overall Taxation revenue
would be negative. Also many other outdoor recrationalists may have used prospecting as an excuse to write off say fishing
camping and unrelated trips expenses.

Another time ATO looked at taxing Hobbyist gold finds was around the release of the SD 2000 when a large number of good nuggets were been found.

 

[mudgee hunter]

WHAT TAX? WHAT GOLD? No idea what your on about ATO!
Fly below the radar on everything!

 

[Jeff]

Gday All

I actually phoned the ATO about that one a month ago. Like a lot of people, the woman that answereds first question was What is a prospector?She had a guess at the answer so I asked her if there was anyone there that actually knew, so she put another chap on, the shift manager who also had never heard of prospecting and sounded somewhat like he was guessing....In the end he was very confident that anything more than ONCE was classed as a subsidiary income. So of corse I said what if I find a $30k nugget on that one occasion? To which he shakely backed up his initial statement.
So being a subsidiary income its added to your gross income, then your deductions are made as a regular job. Your detector, your pack, your crevicing tools etc.....
My thing is if I dont show an income( confess my finds) it might be hard to get other things done like another mortgage for a home. Or if you get audited and theres no explanation for the new Ute-youve got problems.
I think seeing a proven accountant is the answer if you have a fair amount of yella.

 

[Dihusky]

Cash is king and untraceable, even negotiate to pay for stuff in gold, working with the smaller country stores under family ownership this could be attractive for them as they'll make money/value increase on the gold. You could even get cash as change... still under the radar All it takes is a mobile to show the current price and a set of scales :Y:

 

[Swinging & digging]

I recall reading maybe in GG & T, ATO can charge Capital Gains Tax on gold you find, say you found a 10 ounce nugget 10 years ago and Gold was $1,000 an ounce. You sell it now at $2150 per ounce, so the taxable amount is 50% of the gain. $5,750 is liable for CGT at your marginal rate.

To my knowledge no person has been asked to pay this yet, but i recall reading the article.

 

[deepblue]

Maybe this link will answer all your questions.
https://www.ato.gov.au/law/view/document?locid='TXR/TR9219/NAT/ATO'&PiT=19930909000001#P1
It gives alot of details and rules in law.
cheers db

 

[Shep]

Thanks fellas, stockpiling might be the easiest way to go and worry about selling it when I go back to work.

 

[madtuna]

Go for it Shep...no harm in taking a year long holiday to pursue your tax free hobby

 

[sand surfer]

Hi shep,it may cost a few dollars but i would see a tax accountant,when we stopped growing smallcrops in 2013, my accountant said i and my partner could earn $30,000 each a year undeclared as we are now hobby farmer's (claiming no deductions at all)the reason for this is it cost's the tax man more to asses a business tax return than what they get out of it,not sure if it is the same for our hobby or not.My partners cousin had to get a abn ,as he was contracting for a company,done his first tax return and they took his abn of him, as he did not earn more than $30,000

 

[condor22]

I recall reading maybe in GG & T, ATO can charge Capital Gains Tax on gold you find, say you found a 10 ounce nugget 10 years ago and Gold was $1,000 an ounce. You sell it now at $2150 per ounce, so the taxable amount is 50% of the gain. $5,750 is liable for CGT at your marginal rate.

To my knowledge no person has been asked to pay this yet, but i recall reading the article.

Don't recall any gold I've found being date stamped like a coin, so how would they know when it was found?

 

[condor22]

Well you can't have a "Full time" hobby, as a hobby is something you do in your spare time and it fits in around your other work/job. And it is hardly "Fosicking" if your doing it full time, it would be called "Prospecting" ickshovel:

I you are doing something full time like detecting/prospecting then they will class it as your job, and gold you sell is your income then, as so you might as well be claiming all expenses, for as we know it is very expensive this detecting for gold.

cheers dave

I'm retired, everything I do is for me and mine and literally a hobby wether I do it some of or all of the time. In Vic. I'm a prospector when out there with the detector, then when I swing the pick I'm a miner. I'm really only a Fossicker in S.A. as any gold found I don't legally own.