Income tax: what is the car limit under section 40-230 of the Income Tax Assessment Act 1997 for the 2018-19 financial year?
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1. The car limit under section 40-230 of the Income Tax Assessment Act 1997 (ITAA 1997) for the 2018-19 financial year is $57,581.
2. In July 2018, Laura buys a car for $60,000 to use in carrying on her business. The car is of a type to which the car limit applies. As Laura started to hold the car in the 2018-19 financial year, in working out the car's decline in value for the 2018-19 income year, the first element of cost of the car is reduced to $57,581.
Date of effect
Commissioner of Taxation
23 May 2018
Appendix 1 - Explanation
|This Appendix is provided as information to help you understand how the Commissioner's view has been reached. It does not form part of the binding public ruling.|
4. 'Car limit' has the meaning given by section 40-230. It is used for the purposes of applying various provisions, including working out the first element of cost of certain cars when calculating their decline in value.
5. The car limit is indexed annually in line with movements in the motor vehicle purchase sub-group of the Consumer Price Index, unless the indexation factor is 1 or less. An amount is indexed by multiplying it by its indexation factor.
the sum of the index numbers for the quarters in the year ending on 31 March just before the start of the relevant financial year / the sum of the index numbers for the quarters in the year ending on the previous 31 March
- 31 March 2018 was 373.0, and
- 31 March 2017 was 376.7
resulting in an indexation factor of 0.990 (rounded to 3 decimal places).
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All legislative references in this Determination are to the ITAA 1997, unless otherwise specified.
See subsection 40-230(3). This limit is indexed annually in accordance with the CPI indexation method provided by Subdivision 960-M.
Not previously issued as a draft
ITAA 1997 40-230
ITAA 1997 40-230(1)
ITAA 1997 40-230(3)
ITAA 1997 Subdiv 960-M
ITAA 1997 960-270(1)
ITAA 1997 960-270(2)
ITAA 1997 960-275(1)
ITAA 1997 960-275(5)