Taxation Determination

TD 93/56W

Income tax: substantiation: car expenses: can the "12% of cost method" under subsection 82KW(3) be used if a car has been obtained by inheritance, gift or prize at no actual cost?

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FOI status:

Notice of Withdrawal

Taxation Determination TD 93/56 is withdrawn with effect from today.

1. Taxation Determination TD 93/56, which issued on 1 April 1993, deals with the cost of a car obtained by inheritance, gift or prize at no actual cost for the purposes of working out a deduction for car expenses using the '12% of cost method' under subsection 82KW(3) of the Income Tax Assessment Act 1936. The Determination states that, in accordance with the official practice for depreciation purposes (as set out in Taxation Ruling IT 2308), the cost of the car is based on a notional cost equal to the depreciated value or notional depreciated value of the car immediately prior to the date of acquisition.

2. For the 1997-98 income year and later years, deductions for car expenses using the '12% of original value' method are worked out under Subdivision 28-D of the Income Tax Assessment Act 1997 (ITAA 1997).

3. From 1 July 2001, the former depreciation rules were replaced with Division 40 of the ITAA 1997. For the purposes of working out deductions for car expenses under Subdivision 28-D of the ITAA 1997, the cost of a depreciating asset obtained by inheritance, gift or prize at no actual cost is now worked out under section 40-180 of the ITAA 1997.

4. As Taxation Determination TD 93/56 is no longer current, it is accordingly withdrawn.

Commissioner of Taxation
17 August 2005

References

ATO references:
NO HOB TD1

Related Rulings/Determinations:

IT 2308

Subject References:
car substantiation rules;
deductions;
substantiation;
12% of cost method

Legislative References:
ITAA 82KW