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Claiming Vehicle Deduction

Discussion in 'Accounting & Tax' started by alexm, 4th May, 2016.

  1. alexm

    alexm Well-Known Member

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    Hi there,

    Recently I purchased a new ute that is used solely for investment purposes (i.e. traveling to our investment properties, construction sites, carrying of materials etc). The vehicle was paid for in cash and is in my personal name (we have properties in our personal and company/trust names).

    What would be the best way to claim all costs for this vehicle (including purchase price)?

    Sorry for the rather broad question. I could ask my accountant however I thought i'd get some broader advice that others on here may also benefit from (plus there's some very good accountants on here).

    Thanks
    Al
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Are you in the business of property investing?
     
  3. alexm

    alexm Well-Known Member

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    Yes, one part of my portfolio is. Another part is PAYG.
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It would be very unlikely that you are in the business of property.
    You could claim per km of use
     
  5. alexm

    alexm Well-Known Member

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    So one part of my portfolio is involved in property development (i.e. building, financing, selling). This is done through trusts/company with ABN etc. Wouldn't be a property business?

    We also have property investments in our own names plus are also PAYG as well. Abit of most things actually.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    That may be classed as a business - but you said you bought the car?
     
  7. alexm

    alexm Well-Known Member

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    That's right. I paid cash in full for the car however it is used 100% for business (I have other cars for private use). Hence why I purchased a commercial vehicle.

    Wondering if the acquisition cost can be treated as a business expense of some sort?

    Thanks
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I don't think so because you are not in business. If the business owner purchased it then it could have been claimed, depending on the cost, or depreciated.
     
  9. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Correct answer is to seek tax advice on your situation that covers business and personal investment use that covers:
    - Vehicle operating costs using a logbook or other basis
    - Cents per KM
    - Possibly a vehicle allowance
    - GST treatment
    - Access to small business depreciation concessions perhaps
    - Substantiation and record keeping

    Commercial vehicles are not 100% deductible just because you think it is. That the rule of a business that operates vehicles for FBT purposes. But you own it. ..You have already said you use it for your investment properties so there is non-business use. ..And even then the IP use may be either capital and non-deductible (ie initial repairs, improvements) or deductible (repairs etc).
     
  10. alexm

    alexm Well-Known Member

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    Thanks guys for your replies. As I noted in my original post, I can easily ask my accountant (and certainly will) however i'm hoping this will improve the body of knowledge here on Property Chat in case someone else has a similar question.

    It sounds a little complex in that:

    (a) I own the vehicle outright in my personal name
    (b) It is used as part of our property development business
    (c) It is used for our investment properties (in company/trust names plus in personal names)
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Its your use of tje word 'our' that is causing you confusion.
     
  12. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Yes thats correct.