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Age limit for ABN?

Discussion in 'Money Management' started by DaveA, 23rd Mar, 2007.

  1. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    is there an age limit for somebody to apply for a ABN?

    the reason i ask is my sister is under 18 still at school, and i was thinking of setting her up with a ABN, and she can complete my book keeping on my IPs.

    This way i can claim a tax deduction (at marginal rates) for the cost and as she has no other income she would recieve it tax free.

    I know a related transaction issue could become of it, but i remember reading as long as it is inline with market rates then that is fine.

    next question would be what is market rates. I was thinking $500 per year, it would be to pay bills (via internet banking), keep manual files up today, scan all paper documents to pdf, enter figures into excel and general admin stuff.

    Otherwise i was thinking per transaction processed. Or just an hourly rate and she bills me an hour a week. (52 hours, say $20 per hour = $1040)

    any suggestions, i know it can be done with wifes just not sure about the 18 issue...

    cheers
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    I don't think she needs and ABN to do what you're proposing. Lots of under 18s work.

    From her perspective to avoid punitive childrens' tax rate, the key is for it to be earned vs unearned income and at a commercial rate.

    Similarly for you it must be a commercial rate. I think a better approach would be $x/hour and she keeps timesheets. Keep it relatively low so no super required to be paid.

    Cheers
    N.
     
  3. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    but wouldnt it need to be a business so i can claim the deduction???

    super i think is 400 per month and i plan for it to be under that...

    It would be earned as she would be doing the work, and i guess $20 would be a comerical rate, but i could search the local paper and see what book keeping jobs are being paid (as my evidence to the ATO)

    Cheers nigel
     
  4. Bantam Roosta

    Bantam Roosta Well-Known Member

    Joined:
    7th Feb, 2007
    Posts:
    115
    Location:
    Canberra, ACT
    She can get an ABN. I had one when I was 15/16? (Can't remember any more)

    I was a musical performer and needed to invoice the companies hiring my group, but in your case, as Nigel said, I don't know if she needs one in this case, although it's a very simple process to go through if you do decide to get one.

    BR
     
  5. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    yeh

    guess i would need to know if she needs teh abn for me to claim a deduction.

    However i think i would set one up anyway for her. I got one at 18. Guess i will talk to nick once im in the position for it...