INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision F - Substantiation of certain expenses of years of income up to and including 1993-94  

SECTION 82KW   DEDUCTION FOR CAR EXPENSES WHERE INCOME-PRODUCING USE EXCEEDS 5,000 KILOMETRES - STATUTORY FORMULA  

82KW(1)   [Election as to deduction]  

Subject to this Subdivision, where a car was owned by, or leased to, a taxpayer during a period (in this section called the holding period ) during a year of income and -

(a) the number of kilometres travelled by the car during the year of income in the course of producing assessable income of the taxpayer was more than 5,000; or

(b) the taxpayer -

(i) first used the car on a day during the year of income other than the first day of the year of income; or

(ii) ceased during the year of income to use the car,

and in all the circumstances it is reasonable to conclude that, had the car been used by the taxpayer during the whole year of income, the number of kilometres travelled by the car during the year of income in the course of producing assessable income of the taxpayer would have been more than 5,000,

the taxpayer may elect that subsection (2) or (3) apply in relation to the car in relation to the year of income.

82KW(2)   [Allowable deduction]  

Subject to this Subdivision, where a taxpayer elects that this subsection apply in relation to a car in relation to a year of income -

(a) subject to paragraphs (b) and (ba), the amount of a deduction allowable to the taxpayer under this Act in respect of a car expense that relates to the car and was incurred by the taxpayer during the year of income shall be 33 ⅓ % of the amount of the deduction that, but for this Subdivision, would have been so allowable in respect of the expense if the car had, throughout the year of income, been used by the taxpayer exclusively in the course of producing assessable income of the taxpayer;

(b) a deduction is not so allowable in respect of such an expense, being an expense in respect of fuel or oil, unless:

(i) odometer records are maintained by or on behalf of the taxpayer for the holding period; or

(ii) documentary evidence of the expense is obtained by or on behalf of the taxpayer;

(ba) a deduction is not so allowable in respect of any other such expense unless documentary evidence of the expense is obtained by or on behalf of the taxpayer; and

(c) sections 82KUA , 82KUB , 82KUC and 82KUD and paragraphs 82KZA(1)(b) and (3)(e) do not apply, and shall be deemed never to have applied, in relation to the taxpayer in relation to such an expense.

82KW(3)   [Alternative basis of deduction]  

Subject to this Subdivision, where a taxpayer elects that this subsection apply in relation to a car in relation to a year of income:

(a) unless paragraph (b) applies - the taxpayer is entitled in respect of the year of income to a deduction of an amount equal to 12% of:

(i) in the case of a car owned by the taxpayer - the cost of the car to the taxpayer; or

(ii) in the case of a car leased to the taxpayer - the market value of the car at the time when the lease was entered into by the taxpayer;

(b) if, throughout a particular period, or particular periods, during that year of income, the car was neither owned nor leased by the taxpayer - the taxpayer is entitled in respect of the year of income to a deduction of the amount ascertained in accordance with the formula

A (365 − B )   , 365

where:

A is the amount of the deduction to which, if this paragraph did not apply, the taxpayer would, by virtue of paragraph (a), have been entitled in relation to the car in respect of the year of income; and

B is the number of days in that period, or the total number of days in those periods, as the case may be; and

(c) a deduction is not allowable, and shall be deemed never to have been allowable, to the taxpayer under this Act in respect of a car expense that relates to the car and was incurred by the taxpayer during the year of income.

82KW(4)   [Cost or market value exceeding motor vehicle depreciation limit]  

For the purposes of the application of subsection (3) in relation to a car in relation to a year of income:

(a) where section 57AF would, but for subsection (3), apply in relation to the car to deem the cost of the car to be the amount of the motor vehicle depreciation limit in relation to the year of first use - the reference in subparagraph (3)(a)(i) to the cost of the car shall be deemed to be a reference to the amount that would be the amount of the motor vehicle depreciation limit if that section applied in relation to the car in relation to the year of income; and

(b) the amount determined to be the market value of the car for the purposes of subparagraph (3)(a)(ii) shall not exceed the amount that would be the motor vehicle depreciation limit in relation to the car had the car been acquired by the taxpayer at its market value and been put to first use in the income year in which the lease was entered into.

82KW(5)   [``leased'']  

In subsections (1), (3) and (4), leased means leased under a lease for a term of not less than 12 months.