Private ruling: CGT on sale of a motor vehicle
Published: October 2014
Ruling period: Year ending 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Can a capital gain or capital loss arising from the sale of a personal use motor vehicle be disregarded? | A1: Yes.

Relevant facts and circumstances: You imported two motor vehicles. An ATO audit determined the motor vehicles were for private purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 (ITAA 1997) section 118-5 | Income Tax Assessment Act 1997 (ITAA 1997) section 995-1

Reasons for decision: Summary: There are some capital gains you can disregard and exclude from your assessable income. Additionally, there are some capital losses you must disregard, that cannot be used to offset other capital gains and reduce your assessable income. Section 118-5 of the ITAA 1997 provides that a capital gain or capital loss from a car is disregarded. A car, as defined under section 995-1 of the ITAA 1997, is a motor vehicle (not a motor cycle) designed to carry less than a tonne or nine passengers. In your case, you have two cars which are used for private purposes. Therefore, any capital gain or capital loss arising from the sale of these cars will be disregarded under section 118-5 of the ITAA 1997.