Jointly Owned Motor Vehicle

Most spouses jointly own their assets, including all their motor vehicles. This is the case even though the motor vehicle registration departments of several State Governments only allow jointly owned motor vehicles to be registered in the name of one spouse.

The ATO have confirmed that they consider a taxpayer to be the owner or lessee of a motor vehicle and eligible to claim expenses where a family or private arrangement made them the owner or lessee even though they were not the registered owner.

This means where a husband and wife jointly own a motor vehicle and they both separately use that vehicle for an income producing purpose (work or a business), then each taxpayer will be entitled to claim a deduction using the cents per kilometre method (up to 5,000 work or business kilometres). This is assuming they each actually did travel 5,000 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 5,000 work or business related kilometres then each spouse would be claiming a deduction for 10,000 kilometres. That is, claiming a total of 20,000 business kilometres between the two spouses (assuming they actually did travel 20,000 work or business kilometres). The ATO allows a deduction of $0.66 per kilometre travelled, so for 20,000 kilometres the total deduction would be $13,200.