Taxation Determination
TD 2008/17
Income tax: what is the car limit for the 2008-2009 financial year?
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Ruling
1. The car limit for the 2008-2009 financial year is $57,180 .
Example
2. In July 2008 a taxpayer purchases a motor vehicle for $60,000 wholly for use in carrying on their business. In working out the vehicle's decline in value they may deduct for the 2008-2009 income year, the first element of cost of the vehicle is reduced to $57,180.
Date of effect
3. This Determination applies for the financial year commencing on 1 July 2008.
Commissioner of Taxation
30 June 2008
Appendix 1 - Explanation
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This Appendix is provided as information to help you understand how the Commissioner's view has been reached. It does not form part of the binding public ruling.
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Explanation
4. The car limit is used to work out decline in value deductions of certain cars under the income tax law.[1]
5. The car limit is indexed annually in line with movements in the motor vehicle purchase sub-group of the Consumer Price Index.
6. For the 2006-2007 year the index was 396.3 and for the 2007-2008 year the index was 396.7, resulting in an indexation factor of 1.001 rounded to 3 decimal places. As a result the car limit for the 2008-2009 financial year increases to $57,180.
Footnotes
Section 40-230 of the Income Tax Assessment Act 1997. The 'car limit' is also used to set the luxury car threshold and is used to determine if luxury car tax is payable - see Luxury Car Tax Determination LCTD 2008/1.
Not previously issued as a draft
References
ATO references:
NO 2006/10715
Related Rulings/Determinations:
LCTD 2008/1
Subject References:
car limit
decline in value
luxury car depreciation limit
motor vehicle depreciation
motor vehicle depreciation limit
Legislative References:
ITAA 1997 40-230
TAA 1953
| Date: | Version: | Change: | |
| You are here | 30 June 2008 | Original ruling | |
| 25 May 2016 | Withdrawn |
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