Car Limit with Business & Personal Split

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(Newbie)Registered Tax Professional

20 Dec 2023

Vehicle purchased 22/23 FY for $76,460 (GST $6,798.60). Business use is 56%. Which scenario is correct (assuming Car Limit of $64,741 & $5,885.55 GST for 100% business usage).

GST claimable 56% on Car Limit of $5,885.55, ($3,295.91) OR
GST claimable 56% on Full Purchase Price $6,798.60 ($3,807.22)

If scenario 1 is correct, are there any exemptions why scenario 2 can be used (eg the car limit of $5,885.55 hasn't been reached). I am getting conflicting information from different sources and would like confirmation from the ATO please.

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AriATO

(Community Support)Community Support

21 Dec 2023

Hi @KarenCQ

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 that limit. Scenario 1 applies to you. Scenario 2 can be used if the vehicle isn't what we define a car to be.

Check out GST and purchasing a car over the limit