Draft Taxation Determination

TD 93/D116

Income tax: motor vehicle substantiation: does the 5000 kilometre limit in section 82KX of the Income Tax Assessment Act 1936 relate to the distance travelled by the car or by the taxpayer?

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by TD 93/177.

FOI status:

draft only - for comment

Preamble

1. It is the distance travelled by the owner (taxpayer) in the car that is relevant to the deduction being claimed. Where two or more taxpayers own a car and each uses that car separately for income procucing purposes, each is entitled to claim a deduction using the set rate per kilometre method up to 5000 kilometres because ownership is considered to include both joint and co-ownership within its ordinary non-technical meaning.

Example 1

Trevor is a real estate salesman and uses the family car during the day for work. Jane his wife, sells beauty products in the evenings. As each uses the car separately for income producing purposes each taxpayer is entitled to claim a deduction using the set rate per kilometre method up to 5000 kilometres.

Example 2

Jack and Jill sell encyclopaedias. They travel together in the family car to a central point where they separate and make their house-calls individually. Each taxpayer may claim a deduction of up to 5000 kilometres, eg. if the total distance travelled for income producing purposes is 10,000 kilometres, each can claim 5000 kilometres.

Commissioner of Taxation
13 May 1993

References

BO CHMTD 001

Subject References:
substantiation
car expenses