If you sell a car that is two years old or less and the car has already been subject to LCT, you may still have to pay LCT on the latest sale if the car has increased in value. The LCT payable on this latest sale is reduced by all the LCT paid (or due to be paid) on any previous sale or importation. In calculating this, you must take into account any previous LCT adjustments, except bad debts.
There is no entitlement to a LCT decreasing adjustment or credit when you resell a car that is two years old or less if the car has decreased in value.
You must have evidence that LCT was previously paid (or due to be paid) on the car, including:
- documents showing your supplier made a taxable sale of a luxury car because you didn't quote your Australian business number (ABN)
- invoices or documents relating to a previous taxable sale or importation
- a written statement from a previous owner or supplier stating the amount of LCT that was previously paid or due to be paid.