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Subject: Work-related car expenses


Are you entitled to a deduction for work-related car expenses using the cents per kilometre method for the use of a car registered in your spouse's name?



This ruling applies for the following periods:

Year ended 30 June 2010

Year ending 30 June 2011

Year ending 30 June 2012

Year ending 30 June 2013

Year ending 30 June 2014

Year ending 30 June 2015

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You own a motor vehicle equally with your spouse as you both paid for it.

You use the motor vehicle for work-related reasons.

The motor vehicle is registered under your spouse's name as it is not possible under state legislation to register a vehicle under two names.

You claimed motor vehicle expenses in the income year using the cents per kilometre method.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 28-12.

Reasons for decision


You are 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 as you have been able to demonstrate that you have ownership of the car.

Detailed reasoning

Section 28-12 of the Income Tax Assessment Act 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:

    · the initial purchase of the car

    · lease payments

    · hire purchase agreements, or

    · 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. 

As you contributed financially to the purchase of the car then you are considered to own the car. You are therefore entitled to claim a deduction for car expenses using the cents per kilometre method.