$20K Instant Asset Write off - Buying a 2nd Hand Car through a Private Seller

barbienewb on 06/03/2018 - 15:59
Last edited 06/03/2018 - 16:00

Hey!

I am exploring whether we can take advantage of the 20K instant tax write off by replacing our family car.

My partner would use it 3 days a week for travelling to see her clients in the CBD and we are aware that we would only therefore claim against 43% of the value.

Her business is not registered for GST so the maximum value of the car we can look to buy is $19,417.48 + stamp duty @ 3%.

If we found a privately advertised car close to - but above- this amount and could not get them to the above magic number, what is to stop us from having the owener receipt the car to that amount and then paying them a side amount to the difference? I am not saying we plan on doing this at all, but am curious to know having never bought privately here if there is anything other than good morals preventing this.

Thank-you in advance.

Automotive

Comments

  • gaz3342 on 06/03/2018 - 16:18
    +30

    Hi everyone,

    I intend to commit tax fraud which will ultimately end up coming out of your pockets, thoughts?

    • barbienewb on 06/03/2018 - 22:04
      -3

      Best of luck to you

  • Wq Orz on 06/03/2018 - 16:21
    +2

    Why not check with your tax accountant, who should tell you the % actually depend on distance traveled for business and personal use of the car in a 12 weeks period (logbook method) instead of days the car available for business use.

    • barbienewb on 06/03/2018 - 21:58

      Hey - yes, spoke with the accountant who mentioned the logbook method. Definitely something we would do.

  • Cyphar on 06/03/2018 - 17:15

    The only legitimate answer you can get here is to check with your accountant. My understanding on it is you can only claim the percentage it is in use. So if it is used for 60% of the time, then you can only claim 60% of the value, as described here and does not include a car that is used to travel to a client. It needs to be used to transport tools as well.

    Don't commit to anything though until you seek professional advice from a qualified accountant

    • barbienewb on 06/03/2018 - 21:59

      According to the ATO website you can claim car expenses for the below - which describes what my wife has to do (she works at her clients office for a lot of project based work and our home is her normal workplace):

      "you can claim if you travel from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client's premises)"

      https://www.ato.gov.au/individuals/income-and-deductions/ded…

      just pasting the link in case this helps other people better understand what they may be eligible to claim…or at least discuss with their accountant.

      • Cyphar on 06/03/2018 - 22:12
        -1

        That link only validates my statement.

        "If the travel was partly private, you can claim only the work-related portion."

        If it's only being used 3 out of 5 days, you can only claim 60% back

        • barbienewb on 06/03/2018 - 22:27

          I think we're both on the same page then, although I was thinking if it's for personal usage too it would be based on 7 days rather than 5 i.e so 3 out of 7 days and so only 43%. Either way, this would all have to be tracked by a logbook to properly represent the business usage.

          Thank you for your responses

        • Cyphar on 06/03/2018 - 23:28

          @barbienewb:

          3 out of 7 days and so only 43%.

          Ahh yeah, that's a valid point. I wouldn't even plan on doing this without seeing an accountant. There's ways this can go bad if not properly calculated correctly. I'd be bound to stuff it up!

  • Rhubarb Jones on 06/03/2018 - 17:34
    +1

    Short answer is yes - you can do that. If the the seller agrees.

    Best to keep it to a small amount… you'll have someone else coming to look for there missing duty if it looks too suss.

    • barbienewb on 06/03/2018 - 22:01
      -1

      Great - this is all I wanted to know. Thank you.

  • whooah1979 on 06/03/2018 - 17:59

    replacing our family car.

    does your partner have another vehicle which she is the registered operator?

    • barbienewb on 06/03/2018 - 22:00

      No, we bought the family car a few Years back ahead of her setting up her own business.

  • itsdougie on 06/03/2018 - 19:07

    now we know your plans, you cant do it.

    • barbienewb on 06/03/2018 - 22:00

      Detective Dougie strikes again!

  • Euphemistic on 07/03/2018 - 05:42

    End of the day, the tax etc will probably be worked out on the receipt value - which was obtained fraudulently.

    But, assuming you are only claiming for a portion can you legitimately claim the portion on a portion of the receipt value? That would not be fraudulent.

    • barbienewb on 07/03/2018 - 10:05

      Yea - it's a good question, but regardless of the % business usage the total value must not exceed $20K. Assets costing $20K or more can be allocated to a pool and depreciated at a rate of 15% in the first year and 30% for each year thereafter.

  • coin saver on 07/03/2018 - 09:41

    If your wife only works at her clients office and your home she can not claim at all.If she is travelling between various clients she can.

    • barbienewb on 07/03/2018 - 10:02
      -1

      Thanks for your input coin saver

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