Luxury Car (Only for Business) Concept
Applicable only for business use.
What is Luxury Car?
In FY 2021 -22 Car Gross Value was more than $60733
In FY 2022 -23 Car Gross Value was more than $64741
Which vehicles are exempt from the Luxury Car Limit?
i. Any vehicle designed to carry a load greater than 1 tonne.
ii. Any vehicle designed to carry 9 or more passengers.
iii. Motorcycles or similar vehicles.
iv. Any vehicles fitted out to use for people living with a disability.
If a car value exceeds above threshold Limit, then they cannot claim deprecation on the full value of the Asset.
Then what is the maximum depreciation allowed on the Luxury car?
Maximum Depreciation allowed on Luxury Car
Example 1: FY 2021-22, Emil Pty Purchase Luxury Car Value $60000?
$60000 Lesser than Luxury Car Limit $60733
So Normal Depreciation
Journal Entry
Car /ac Dr 53636
GST a/c Dr 5363
Stamp Duty a/c Dr 1000
To Bank 60000
(Being a New Car purchase)
Car a/c Dr 1000
To Stamp Duty 1000
(Stamp duty value added to cost of the car)
Depreciation a/c Dr 5464
To Car 5464
(Depreciation at 10%)
Example 2: FY 2021-22 Emil Pty Purchase Luxury Car Value $71000
$71000 Exceed Luxury Car Limit
Journal Entry
Car /ac Dr 63636
GST a/c Dr 6363
Stamp Duty a/c Dr 1000
To Bank 71000
(Being a New Car purchase)
Car a/c Dr 1000
To Stamp Duty 1000
(Stamp duty value added to cost of the car)
Depreciable Car a/c Dr 55211.82
No Depreciable Car a/c Dr 10267
GST a/c Dr 5521.18
To Stamp Duty 71000
(Maximum value allowed as per Luxury Car Limit)
Depreciation a/c Dr 5521
To Car 5521
(Depreciation at 10%)
