Taxation Determination

TD 95/25

Income tax: is a hearse a motor car or a station wagon for the purposes of section 57AF of the Income Tax Assessment Act 1936 and therefore subject to the limit on cost price for depreciation?

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FOI status:

may be releasedFOI number: I 1015912

1. No. A hearse is not a motor car or station wagon within the meaning of paragraph 57AF(1)(b) and therefore is not subject to the limit on cost price for depreciation.

2. Section 57AF applies to a unit of property (other than an excluded unit of property) being:

(a)

a unit of property in respect of which depreciation is allowable under this Act; and

(b)

a motor vehicle (including a vehicle known as a four wheel drive vehicle) that is a motor car or station wagon.

3. The Macquarie Dictionary defines a hearse as 'a funeral vehicle for conveying a dead person to the place of burial'.

4. Whether a hearse is a unit of property for the purposes of section 57AF depends on whether it can be said to be a motor car or a station wagon. The Macquarie Dictionary defines a station wagon as 'a car with an extended interior allowing extra space behind the rear seat, and a door or tailgate at the back'. It further includes a 'motor car' in its definition of 'car'. For the purposes of this determination it is considered that nothing turns on the issue of whether the hearse is derived from a motor car or a station wagon.

5. In Case Z25 92 ATC 247; Case 8063 (1992) 23 ATR 1211 in considering whether a stretched limousine qualified as a motor car for the purposes of section 57AF, Dr Gerber said (92 ATC at 250; 23 ATR at 1213-4):

'...the term "motor car" as used in subsecs 57AF(1), 57AG(1) and 82AF(2) is to be restricted to a closed or semi-closed vehicle primarily for the carriage of passengers, and only for the incidental carriage of goods'.

6. The conversion of a motor vehicle into a hearse involves extensive modifications which effect a permanent alteration to the vehicle so as to change its inherent design (see paragraphs 7 and 8 of Miscellaneous Taxation Ruling MT 2033.

7. As a matter of common usage and looking at the way hearses are made and used, we do not consider them to be either a motor car or station wagon for the purposes of paragraph 57AF(1)(b).

Commissioner of Taxation
22/06/95

Previously issued as Draft TD 94/D102

References

ATO references:
NO PUL A857; NAT 94/6061-6

Related Rulings/Determinations:

MT 2033

Subject References:
allowable deductions;
depreciation;
depreciation limit;
hearse;
motor vehicles

Legislative References:
ITAA 57AF;
ITAA 57AF(1);
ITAA 57AF(1)(b);
ITAA 57AG(1);
82AF(2)

Case References:
Case Z25
92 ATC 247

Case 8063
(1992) 23 ATR 1211