The ATO have confirmed that even when a vehicle is only registered in their spouses name a taxpayer is still considered to be the joint owner or lessee of the motor vehicle and eligible to claim expenses. 

This means where two spouses jointly own a motor vehicle and they both separately use that vehicle for an income producing purpose (work or a business), each taxpayer will be entitled to claim a deduction using the cents per kilometre method (up to 5,000 work or business kilometres) assuming they each actually travelled 5,000km work or business kilometres.

Additional tax deductions are potentially available if a husband and wife jointly owned two motor vehicles. If both spouses used each vehicle to travel 5,000km for work or business then each spouse would be claiming a deduction for 10,000 kilometres. That is, claiming a total of 20,000km between the two spouses (assuming 20,000km for work or business were travelled).

The ATO allows a deduction of $0.68 per kilometre travelled, so for 20,000 kilometres the total deduction would be $13,600.

A diary evidencing business or work related kms travelled on each motor vehicle will be required.

Please refer PS LA 1999/2 - Calculating joint car expense deductions. 

If you would like to discuss further please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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