Taxation Determination TD 95/27







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part . Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner . Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue . However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. The deductibility of the interest expenses after disposal of the vehicle will depend upon whether the borrowed money is still used for income-producing purposes. | 2. After the vehicle is sold, the taxpayer may use the money received from the sale to gain or produce assessable income. In that case, the interest paid by the taxpayer is still deductible. However, if the money is used for some other purpose, such as a private purpose or to gain or produce exempt income, the interest will not be deductible under subsection 51(1). | Example: Jerry has been employed for some years by PDQ Building Company as a plumber. In 1990 Jerry borrowed $30,000 to buy a four-wheel-drive vehicle which he used wholly in the course of his employment. | Note: The Notice of Partial Withdrawal that issued on 29 June 2001 changed this Determination with effect from 29 June 2001. | Commissioner of Taxation 22/06/95 | Previously issued as Draft TD 94/D106 | Consolidated ruling + note


Legislative references: ITAA 51(1)
Subject references: allowable deductions; interest expenses