Private ruling: Depreciation
Published: August 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for the full depreciable cost of your light commercial vehicle? | A1: Yes.

Relevant facts and circumstances: You purchased a six seater 2.5 to 2.7 tonnes load capacity light commercial vehicle. You use this vehicle 100% for business purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 40-230 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: Section 40-230 of the Income Tax Assessment Act 1997 (ITAA 1997) details when the car limit applies to a motor vehicle: The first element of the cost of a car designed mainly for carrying passengers (after applying section 40-225 and Subdivision 27-B) is reduced to the car limit for the financial year in which you started to hold it if its cost exceeds that limit. Car is defined in section 995-1 of the ITAA 1997 as: motor vehicle (except a motor cycle or similar vehicle) that is designed to carry a load of less than 1 tonne and fewer than 9 passengers and motor vehicle is also defined in section 995-1 as any motor powered road vehicle (including a 4 wheel drive vehicle). In your case, from the description provided, the motor vehicle you purchased is not a car for the purposes of section 40-230 of the ITAA 1997 and therefore the car limit does not apply when calculating depreciation for the motor vehicle.