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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051248508135

Date of advice: 11 July 2017

Ruling

Subject: Work related Motor vehicle expenses

Question 1

Can the Trustee for the X Family Trust claim motor vehicle expenses for a vehicle provided to the employee?

Answer

Yes

This ruling applies for the following period:

Year ending 30 June 2017

The scheme commences on:

01/07/2016

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

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:

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.

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.

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