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Edited version of private advice
Authorisation Number: 1012680287767
Ruling
Subject: Depreciation
Question
Are you entitled to a deduction for the full depreciable cost of your light commercial vehicle?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts and circumstances
You purchased a six seater 2.5 to 2.7 tonnes load capacity light commercial vehicle.
You use this vehicle 100% for business purposes.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Income Tax Assessment Act 1997 section 40-230
Income Tax Assessment Act 1997 section 995-1
Reasons for decision
Section 40-230 of the Income Tax Assessment Act 1997 (ITAA 1997) details when the car limit applies to a motor vehicle:
The first element of the cost of a car designed mainly for carrying passengers (after applying section 40-225 and Subdivision 27-B) is reduced to the car limit for the financial year in which you started to hold it if its cost exceeds that limit.
Car is defined in section 995-1 of the ITAA 1997 as:
motor vehicle (except a motor cycle or similar vehicle) that is designed to carry a load of less than 1 tonne and fewer than 9 passengers and motor vehicle is also defined in section 995-1 as any motor powered road vehicle (including a 4 wheel drive vehicle).
In your case, from the description provided, the motor vehicle you purchased is not a car for the purposes of section 40-230 of the ITAA 1997 and therefore the car limit does not apply when calculating depreciation for the motor vehicle.