CARS AND TAX

From 1 July 2020 the following car threshold amounts apply.

Income tax

• There's an upper limit on the cost you use to work out the depreciation for the business use of your car or station wagon (including four-wheel drives). You use the car limit that applies to the year you first use or lease the car.
• The car limit for 2020–21 is $59,136.

Goods and services tax (GST)

• Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of the car limit amount.
• You can't claim a GST credit for any luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car in carrying on your business.

Luxury car tax (LCT)

• From 1 July 2020 the LCT threshold will increase to $ $68,740.
• The LCT threshold for fuel efficient cars will increase to $77,565 for the 2020–21 financial year.
• Remember, the LCT value of a car generally includes, the value of any parts, accessories or attachments supplied or imported at the same time as the car

Like always, please do not hesitate to contact us on 8538 7266 should you have any questions.

Article posted on Thursday 18th June, 2020