Do you know the car threshold amounts that apply from 1 July 2018?

The ATO has announced that from 1 July 2018 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 2018-19 is $57,581.

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

From 1 July 2018 the tax threshold for luxury cars increased to $66,331.

The threshold for fuel efficient luxury cars for the 2018-19 financial year remains at $75,526.

In general, the value of a car includes the value of any parts, accessories or attachments supplied or imported at the same time as the car.

The above is general advice only and may not suit your specific circumstances.

More info here

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