Private ruling: Work related Motor vehicle expenses
Date of advice: 11 July 2017
Published: November 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 01/07/2016

Ruling: Q1: Can the Trustee for the X Family Trust claim motor vehicle expenses for a vehicle provided to the employee? | A1: Yes


Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1

Reasons for decision: Detailed Reasoning - Work-related travel expenses: An expense is deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) if and to the extent to which it is incurred in gaining or producing your assessable income or in carrying on a business for that purpose. However you cannot claim a deduction for an expense that is of a capital, private or domestic nature. A deduction is only allowable if an expense: ● is actually incurred ● meets the deductibility tests ● satisfies the substantiation rules. A business can generally claim expenses for a motor vehicle owned or leased as long as the expenses are incurred as part of the everyday running of the business. These expenses can include the costs for providing a motor vehicle to an employee (or their associate) as part of their employment. In your circumstances the trust is entitled to claim for the motor vehicle expenses used by the employee in the course of the business. All records regarding the business travel expense claim such as log books of distance and place travelled should be kept for at least 5 years after the issue of the relevant notice of assessment as the company or trust may be asked to show how the expenses were connected to the business. | Detailed Reasoning - Other relevant comments: The question of FBT has not be answered by this application however the portion of the vehicle use that is for private use of the vehicle may be subject to FBT. Any determination would require a separate application to determine the FBT Implications.