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  • Faedy
    replied
    Originally posted by ccpl View Post
    If the vehicle is classified as a passenger vehicle and is not exempt from the various depreciation and FBT rules, you have to consider the car limit when claiming depreciation, which is $60,733 for FY21-22 - so regardless of how much work usage you can claim, the maximum claimable depreciation value is only $60,733.

    Depending on how you structure the Company and purchase, this could mean for your 170k car, a 50/50 work/play split would net you around ~$30k in claimable depreciation (regardless of whether or not you could claim under Temporary Full Expensing in the first year, or over the course of multiple years). Ultimately, the car limits means the extra ~$110k of the car cost isn't going to net your company any tangible tax benefits.

    You also need to be weary of FBT as mentioned above - if you expect 50/50 usage, you would be better off using the Statutory method which is 20% of the vehicle cost. That means every FBT year, your company would need to pay $34k in FBT for your personal usage - you could also contribute that to the Company as income to offset the FBT (or offset further by claiming any running costs you incurred from your post-tax income).

    Another consideration is that the car limit also applies to the GST amount claimable (assuming you are registered for GST) so you could only claim up to the car limit value of $5521 - conversely if you sell the Vehicle and are registered for GST, you have to charge the full amount of GST for the sale value.

    TLDR; buying a vehicle for much over $60k for tax benefits under a Company that isn't a work ute or similar is a bad idea
    Cheers
    Looks like I listen to my Accountant this time....
    She has aways looked after me, so I'll trust her once again

    Leave a comment:


  • Greg Rust
    replied
    You can claim $10k per year if your car is stickered up with a business name and you participate in motorsports events. I did this for many years with bonuses paid by my employer as they had paid me to promote their business.

    Leave a comment:


  • burn is weird
    replied
    *unless you want to skirt the hoon law seizure rules

    Leave a comment:


  • ccpl
    replied
    If the vehicle is classified as a passenger vehicle and is not exempt from the various depreciation and FBT rules, you have to consider the car limit when claiming depreciation, which is $60,733 for FY21-22 - so regardless of how much work usage you can claim, the maximum claimable depreciation value is only $60,733.

    Depending on how you structure the Company and purchase, this could mean for your 170k car, a 50/50 work/play split would net you around ~$30k in claimable depreciation (regardless of whether or not you could claim under Temporary Full Expensing in the first year, or over the course of multiple years). Ultimately, the car limits means the extra ~$110k of the car cost isn't going to net your company any tangible tax benefits.

    You also need to be weary of FBT as mentioned above - if you expect 50/50 usage, you would be better off using the Statutory method which is 20% of the vehicle cost. That means every FBT year, your company would need to pay $34k in FBT for your personal usage - you could also contribute that to the Company as income to offset the FBT (or offset further by claiming any running costs you incurred from your post-tax income).

    Another consideration is that the car limit also applies to the GST amount claimable (assuming you are registered for GST) so you could only claim up to the car limit value of $5521 - conversely if you sell the Vehicle and are registered for GST, you have to charge the full amount of GST for the sale value.

    TLDR; buying a vehicle for much over $60k for tax benefits under a Company that isn't a work ute or similar is a bad idea

    Leave a comment:


  • Faedy
    replied
    ok - car is 170k
    I would like to know the sums.
    Say 50/50 work/play
    My Company could stump up 100k and finance the rest.
    Anyone able to do the sums and show me the costs/benefits compared to privately owned.
    My business has very few tax deductions these days
    I dont take wages, only dividend.

    Leave a comment:


  • Neeek
    replied
    Originally posted by s13_pwr View Post

    That correct, the rate was just a reference. What I was pointing out was the benefit of a pre-tax deduction in a Company is 25-30%. On the flip side you may have FBT levied in a Company at 47% on the taxable value. So while there are many factors that impact the calculation its unusual to be better off paying FBT.

    Owning the car in your own name and claiming under the log-book method could give you a similar 'pre-tax money' benefit, without the FBT liability (and compliance costs that go with it). Again benefit depends on your income tax bracket etc.
    Indeed, lots of factors to consider for FBT and it doesn't always work in your favour to run a company car vs privately. Depends on whether the car is financed or bought outright, the actual value of it, intended use, method of FBT calculation... there's no quick answer, only scenarios.

    Once again, a good accountant will be able to steer you in the best direction for your individual circumstances.

    Leave a comment:


  • s13_pwr
    replied
    Originally posted by IMOA View Post

    That’s not how FBT works though. FBT is based on the vehicle value, the savings you get are based on being able to pay running costs from pre tax money. Now granted a modern luxury vehicle in a low interest era is the absolute worst possible combination to have but comparing the tax rates is a bad approach because those rates are being applied to different things.
    That correct, the rate was just a reference. What I was pointing out was the benefit of a pre-tax deduction in a Company is 25-30%. On the flip side you may have FBT levied in a Company at 47% on the taxable value. So while there are many factors that impact the calculation its unusual to be better off paying FBT.

    Owning the car in your own name and claiming under the log-book method could give you a similar 'pre-tax money' benefit, without the FBT liability (and compliance costs that go with it). Again benefit depends on your income tax bracket etc.

    Leave a comment:


  • IMOA
    replied
    Originally posted by s13_pwr View Post


    Given the FBT rate is 47% it is extremely rare that it works out cheaper to pay FBT. Where it does, typically in these scenarios it comes unstuck when the ATO put the lense over the taxpayers facts/calculations.

    Even if you are making an employee FBT contribution to reduce the FBT to nil. The accountant may give themselves a pat on the back for saying FBT is now nil without telling you that you have created additional income tax payable, GST payable and potentially loan issues as a result.
    That’s not how FBT works though. FBT is based on the vehicle value, the savings you get are based on being able to pay running costs from pre tax money. Now granted a modern luxury vehicle in a low interest era is the absolute worst possible combination to have but comparing the tax rates is a bad approach because those rates are being applied to different things.

    Leave a comment:


  • s13_pwr
    replied
    Originally posted by Neeek View Post
    It's not a totally stupid idea to have the company own the vehicle in certain circumstances, but a good accountant should be able to guide you on the ins and outs.

    Both my cars are company-owned vehicles. I own the business and I pay myself a salary from it and I'm all set up for FBT. The short version is that the business owns the cars, pays for rego, insurance, fuel, and all maintenance out of its pre-tax earnings. I pay the FBT. They're not what you'd call "commercial vehicles", obviously, but it's all calculated properly and is 100% above board, to the letter. Works out a damn sight cheaper for me this way than if I personally owned and ran the cars. They don't have to be utes, they don't have to have graphics plastered all over them, and they certainly don't need to be 100% business use.

    If your accountant doesn't want you to do it, ask them why. And if they can't give you a valid reason, citing real tax maths n shit, it may be time to find another who is more suited to what you want?

    Given the FBT rate is 47% it is extremely rare that it works out cheaper to pay FBT. Where it does, typically in these scenarios it comes unstuck when the ATO put the lense over the taxpayers facts/calculations.

    Even if you are making an employee FBT contribution to reduce the FBT to nil. The accountant may give themselves a pat on the back for saying FBT is now nil without telling you that you have created additional income tax payable, GST payable and potentially loan issues as a result.

    Leave a comment:


  • aerobrick
    replied
    Company car C8 corvette? Convert to shooting brake?

    Originally posted by burn is weird View Post

    when do you get to drive it in that scenario?
    An industrial designer friend in Tokyo was told to drive home the company R35 when the last tsunami hit. (His team designed the dash years beforehand). So those scenarios happen, but probably not worth the stress

    Leave a comment:


  • SlutNutz
    replied
    I paid 118k DA before the prices went apeshit. The first 67 is a write off, the rest I wear.

    Leave a comment:


  • Ribfeast
    replied
    I thought a Sahara was around $130k?

    Leave a comment:


  • SlutNutz
    replied
    Originally posted by Neeek View Post
    It's not a totally stupid idea to have the company own the vehicle in certain circumstances, but a good accountant should be able to guide you on the ins and outs.

    Both my cars are company-owned vehicles. I own the business and I pay myself a salary from it and I'm all set up for FBT. The short version is that the business owns the cars, pays for rego, insurance, fuel, and all maintenance out of its pre-tax earnings. I pay the FBT. They're not what you'd call "commercial vehicles", obviously, but it's all calculated properly and is 100% above board, to the letter. Works out a damn sight cheaper for me this way than if I personally owned and ran the cars. They don't have to be utes, they don't have to have graphics plastered all over them, and they certainly don't need to be 100% business use.

    If your accountant doesn't want you to do it, ask them why. And if they can't give you a valid reason, citing real tax maths n shit, it may be time to find another who is more suited to what you want?
    Yeah same.

    When I started my company, I kept a logbook for 3 months when doing purely FIFO. Resulted in 100% business use and the logbook is good for 5 years I think. After that I transferred the car to the business and all expenses paid for by company credit card. Then bought a new 200 series Sahara through the business for the $67k write off as I needed to get my expenses up, transferred the logbook over.

    My accountant was a bit suss when I told him it was 100% business use as per logbook but at the time that's what it was. It has changed now with a lot more work from home. I have started another logbook now to more accurately capture the business/personal use.

    Leave a comment:


  • Paddington
    replied
    Be Lindsay Fox. Start a car museum and don’t let people enter.

    Leave a comment:


  • Babalouie
    replied
    Originally posted by Monza View Post
    My company wants to by a c8 corvette also

    Surely it comes in under the 150k instant asset write off
    Yeah but you can only write off cars up to the luxury car limit of $67k

    Leave a comment:

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