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Taxation Determination

TD 94/15

Income tax: if a taxpayer uses a car of the type defined in paragraph 82KV(4)(a) of the Income Tax Assessment Act 1936 in the course of producing assessable income, are related car expenses exempted from the substantiation provisions where the car is used other than in an exempt manner at any time during the year of income?

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FOI status:

may be releasedFOI number: I 1217027

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. No. Section 82KV only provides relief from the substantiation provisions where a car that is a taxi, a panel van or a utility truck, or any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passangers) is used exclusively in an exempt manner for the whole of the year of income.

2. If a car referred to in paragraph 1 is used for a purpose other than

a.
producing assessable income;
b.
travel between home and work; or
c.
travel incidental to producing assessable income,

the car has not to be used in an exempt manner for the whole of the year of income and is therefore subject to the substantiation provisions.

3. An example of incidental travel referred to in paragraph 2(c) would include picking up the paper on the normal route to work where there is not detour involved. In contrast, incidental travel would not include detours to drop children off to school.

Example 1

A taxpayer is a carpenter who owns a utility truck. He uses the utility to transport his tools from home to work and from job site to job site. During the year of income he also uses the utility to go on several fishing trips. As he has used his utility in a manner other than an exempt manner (as set out in paragraph 2 above) the substantiation provisions will apply to the claim for motor vehicle expenses.

Commissioner of Taxation
27/1/94

Previously issued as Draft TD 93/D184

References

ATO references:
NO UMG 0053

ISSN 1038 - 8982

Subject References:
exempt manner;
motor vehicle;
substantiation

Legislative References:
ITAA section 82KV

TD 94/15 history
  Date: Version: Change:
You are here 27 January 1994 Original ruling  
  20 August 1997 Withdrawn  

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