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Edited version of private ruling
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Ruling
Subject: Motor vehicle classification
Question
Is your motor vehicle a "car" for the purposes of Division 28 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer:
No.
This ruling applies for the following period
Year ending 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You own a vehicle which has a gross vehicle mass of Xkg and a basic kerb weight of Ykg. The carrying capacity is therefore Wkgs.
You fitted a bullbar and roof racks to the vehicle.
The weight of the bullbar and roofracks together with the weight of fuel, the driver and passengers is in excess of Vkgs.
Relevant legislative provisions
Income Tax Assessment Act 1997 Division 28-12
Income Tax Assessment Act 1997 Division 995
Reasons for decision
The method for claiming deductions for motor vehicle expense depends upon whether the motor vehicle is considered to be a car for income tax purposes.
If the vehicle is a car the four methods set out in Division 28 of the ITAA 1997 can apply. However if the motor vehicle is not a car, expenses would be claimed under section 8-1 of the ITAA 1997.
The definition of a car can be found in section 995-1 of the ITAA 1997 where it states that a "car means a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than one tonne and fewer than 9 passengers."
MT 2024 provides guidance at paragraph 11 about determining the carrying capacity of a vehicle. Paragraph 11 states that "the designed load capacity of a motor vehicle is to be taken as the gross vehicle weight as specified on the compliance plate by the manufacturer (basically the all-up loaded weight), reduced by the basic kerb weight of the vehicle. For this purpose, basic kerb weight is synonymous with unladen weight, as specified in the Australian Design Rules, being the weight of the vehicle with a full tank of fuel, oil and coolant together with spare wheel, tools (including jack) and installed options. It does not include the weight of goods or occupants."
Installed options are considered to be factory fitted options such as airconditioning. Bullbars and roof racks are not considered to be installed options for the purpose of determining the basic kerb weight under the Australian Design Rules.
In your case your vehicle is designed to carry fewer than 9 passengers and therefore in order for the vehicle to be a car the carrying capacity would need to be less than one tonne. As the driver, passengers and fitted extras are not used in the calculation of the carrying capacity it is considered that your vehicle is not a car. Therefore the four methods of claiming car expenses under Division 28 of the ITAA 1997 would not be available to you.