Private ruling: Work related motor vehicle usage
Date of advice: 9 December 2015
Published: February 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for work-related car expenses using the cents per kilometre method for the use of a motor vehicle owned by your spouse? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 28-12

Reasons for decision: Summary: You may be entitled to a deduction for car expenses using the cents per kilometre method even if the motor vehicle is registered under your spouse's name if you have been able to demonstrate that you have ownership of the car. | Detailed Reasoning - Detailed reasoning: Section 28-12 of the Income Tax Assessment Act 1997 (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: n the initial purchase of the car n lease payments n hire purchase agreements, or n 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. Based on the information you have provided, you are not considered to own the car. You are therefore not entitled to claim a deduction for car expenses using the cents per kilometre method.

Relevant facts: You and your spouse use a motor vehicle for work-related reasons. | The vehicle is owned by your spouse, and expenses for the vehicle come from the business account which is held by your spouse. | You have full access to the account and it is also used for private purposes. | Your work related usage is separate and not related to your spouse's business usage of the vehicle.