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Edited version of your written advice
Authorisation Number: 1013055694699
Date of advice: 20 July 2016
Ruling
Subject: Fringe Benefit Tax - Car Benefit Decline in Value - Depreciating Asset (Car)
Issue 1
Question 1
Is the cost price of the car $A for purpose of calculating taxable value of car fringe benefit?
Answer
Yes.
Issue 2
Question 1
How much is the first element of cost of the car for purpose of calculating deductions for decline in value of the car?
Answer
$B (GST exclusive).
This ruling applies for the following periods:
Income year ended 30 June 201X
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986
Income Tax Assessment Act 1997
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The entity plans to purchase a new car and to provide the car to its employee for both business and private use.
Both the entity and the employee will make certain amounts of payments to the car dealer to purchase the new car.
Issue 1
Question 1
Reasons for decision
On the facts and on the basis that there is/are no other amount(s) directly attributable to the acquisition or delivery of the new car, the cash payment that the employee will pay directly to the car dealer reduces the amount of the purchase price of the new car; accordingly, cost price of the new car is $A for calculating taxable value of the car fringe benefit.
Issue 2
Question 1
Reasons for decision
On the facts, decline in value of the new car is calculated on the basis of its cost to the entity from when its start time occurs under section 40-60 of the Income Tax Assessment Act 1997; the first element of cost of the car for purpose of calculating deductions for decline in value of the car is the amount that the entity will be taken to have paid in order to hold the new car under subsection 40-185(1) of the Income Tax Assessment Act 1997, which is $B (GST exclusive).