tl;dr: Can I claim a depreciation deduction on a leased motor vehicle costing less than the luxury car limit, if using the logbook method?
When trolling through the ATO website for item D1 on my tax return (https://www.ato.gov.au/Individuals/Tax-Return/2017/Tax-retur…) I noticed a link to the "special circumstances glossary" (https://www.ato.gov.au/individuals/tax-return/2017/supportin…).
This glossary included the following quip (under the "Leased Luxury Cars" subheader): You can claim a deduction for the decline in value of a leased luxury car (but not for other leased cars).
Obviously including decline in value increases the car deduction, above operating expenses, significantly. However I do understand that lease repayments include a portion of capital and a portion of interest, which is not itemised, so I would be effectively claiming a deduction for some capital repayments under the lease.
But why would you be able to claim it if your car was worth more than $57k, and not if it was less?
I have an ongoing migraine at the way the ATO presents information.
The special page covers 200 topics with no depth at all. Grrr.
I don't understand the exclusion for non-luxury cars either. My understanding is the log book method is an operating expense for the vehicle and the depreciation was additional, but I have not claimed vehicle expenses for some time. My only guess as to why they are treating luxury cars differently is that there is the additional luxury car tax on costlier imported vehicles, so maybe they are obliquely indicating there is tax paid for that that is refunded if the vehicle is used for business purposes.
My default position with anything I read on the ATO site is that they present it in such a way to make you believe a deduction does not apply, but when you talk to tax agents they point to many routine claims to the contrary.
Luckily, there will be an up to date tax expert along shortly to clear up the confusion. OzBargain is good like that.