I am looking to purchase a work vehicle for my business and will require a car loan. I understand that the interest paid on the loan is tax deductible, but approximately what percentage is tax deductible? I am looking at a $35,000 loan over 5 years and interest will accumulate to approx $6500. The vehicle will be 90% business usage.
Hi @Grids,
The deductibility of interest is based on the purpose of the loan and how the borrowed funds are used in the course of you gaining or producing assessable income.
The claimable portion of interest must relate to the percentage of use in deriving assessable income. Based on your original post, 90% of the interest on the loan should be claimable when you become liable for the amount. So as the interest is applied over the course of the year, you can claim the business percentage of that in the year it's applied to your loan.
Check out deductions for operating expenses on our website
Hi @Grids,
The deductibility of interest is based on the purpose of the loan and how the borrowed funds are used in the course of you gaining or producing assessable income.
The claimable portion of interest must relate to the percentage of use in deriving assessable income. Based on your original post, 90% of the interest on the loan should be claimable when you become liable for the amount. So as the interest is applied over the course of the year, you can claim the business percentage of that in the year it's applied to your loan.
Check out deductions for operating expenses on our website
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