Private ruling: Motor vehicle expenses
Published: June 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for work-related car expenses for the use of a car registered in your spouse's name? | A1: Yes


Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1. | Income Tax Assessment Act 1997 section 28-12.

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. Section 28-12 of the ITAA 1997 provides that a deduction for car expenses can be made using one of four methods if the taxpayer owned or leased a car or hired a car under a hire purchase agreement. Normally a car will be registered in the name of its owner. However, a taxpayer may be considered to be the owner or lessee of the car where a family or private arrangement makes them owner or lessee even though they are not the registered owner. A taxpayer can prove ownership of the car by demonstrating their financial contributions to any of the following: · the initial purchase of the car · lease payments · hire purchase agreements, or · loan payments. A taxpayer may not be considered to own or lease the car if they do not contribute to the payment of one of the above, even though the taxpayer pays for expenses such as registration, insurance, maintenance or other running costs. This does not prevent the taxpayer from claiming a deduction for the expenses they pay, but they cannot use one of the four car expenses methods in doing so. In your case you have contributed financially from your joint bank account toward the purchase of the car, you are considered to own the car. You are therefore entitled to claim a deduction for car expenses when you use the car to take goods after hours from the warehouse to your home to be repacked and returning them the next day.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You own a motor vehicle equally with your spouse as you both paid for it from your joint bank account. | You and your spouse use the motor vehicle for work-related reasons. | It is a requirement of your job to take goods home overnight to be repacked. | All goods that are needed to be repacked are collected from the warehouse after normal working hours and returned to work the next day. | The motor vehicle is registered under your spouse's name.