Tax man targets "luxury cars"

[WILDTRAKPX2]

The tax office are now targeting owners of cars worth more than $55,000.

http://www.news.com.au/story/0,10117...80-421,00.html

[4.9 EF Futura]

Lol, not really targeting people with cars > $55k.... targeting tax cheats with cars > $55k...

Good on em

[Penelope Pitstop]

Well I own two cars over $55K so I guess they will check on me.... I have nothing to hide and either does my accountant.

I don't know if I would classify FPV's as Luxury vehicles though.

[MoreHPformyXR6]

Just for my interest when does luxury car tax kick in & how much does the ATO extract for the privalage?

[4.9 EF Futura]

Originally Posted by MoreHPformyXR6

Just for my interest when does luxury car tax kick in & how much does the ATO extract for the privalage?

LCT is for $57k+ and is like a sales tax which is added to the GST inclusive price.... 25% of the ex GST amount over $57k IIRC

http://www.privatefleet.com.au/index...D=228&branch=7

[WILDTRAKPX2]

The luxury car tax is currently 25%. It applies on every dollar above $57,009. It applies on accessories too, so educate yourself about how you should deal with accessories before you buy.

[gtfpv]

good . if there are people out there driving gt-p's and fairlanes posches etc etc , with taxable incomes of $27 000 illegally well i hope these people go to jail.

[MoreHPformyXR6]

Originally Posted by Shockwave XR8

The luxury car tax is currently 25%. It applies on every dollar above $57,009. It applies on accessories too, so educate yourself about how you should deal with accessories before you buy.

Does that include ORC?
& on a car that cost $60k u pay $747.75 luxury car tax correct? What a rip off

[EA2BA]

A rumour I heard is that Holden planned to sell an HSV car with bare minimum and then dealer fit the bulk of it to get around luxury tax.

No true EA2BA. The tax is charged on what is invoiced for the specific car. So even if a dealer fits options then that is also subject to the LCT.

[EA2BA]

The options where to be fitted after the fact as an extra, not as part of original invoice, so you would pay for the car invoice, then pay for the kit invoice later.

[WILDTRAKPX2]

Originally Posted by gtfpv

good . if there are people out there driving gt-p's and fairlanes posches etc etc , with taxable incomes of $27 000 illegally well i hope these people go to jail.

I agree that anyone rorting the system should be prosecuted. The vast majority will be doing the right thing however that won't stop the tax office from subjecting an innocent minority to unnecessary, stressful, time-consuming and costly audits.

[4.9 EF Futura]

Originally Posted by Shockwave XR8

I agree that anyone rorting the system should be prosecuted. The vast majority will be doing the right thing however that won't stop the tax office from subjecting an innocent minority to unnecessary, stressful, time-consuming and costly audits.

My understanding of these "audits" is that they are really just cross checking databses... not an audit per-se... if the computer check reveals something worthwhile then the real audit would ensue...

And sure there will be innocent parties subjected to these rigorous audits.... but who is to blame - the ATO... or the tax cheats who prompt the ATO to undergo such excercises.... ?

[Grasshoppr]

Originally Posted by MoreHPformyXR6

Does that include ORC?
& on a car that cost $60k u pay $747.75 luxury car tax correct? What a rip off

It does not include ORC, it is only on the actual car + accessories price

[WILDTRAKPX2]

Originally Posted by 4.9 EF Futura

My understanding of these "audits" is that they are really just cross checking databses... not an audit per-se... if the computer check reveals something worthwhile then the real audit would ensue...

Let's hope the bureaucrat who makes the ultimate decision is fair and reasonable.

And sure there will be innocent parties subjected to these rigorous audits....

That's my point precisely.

but who is to blame - the ATO... or the tax cheats who prompt the ATO to undergo such excercises.... ?

Blame. There is no real benefit blaming something or someone. It's going to happen regardless.

[Fairlane]

Just on the accesories thing, say you buy a Fairlane for 56 including ORC, drive away, come back the following day and option it up you would avoid the luxury car tax?

[4.9 EF Futura]

Originally Posted by Shockwave XR8

Blame. There is no real benefit blaming something or someone. It's going to happen regardless.

I'll lift my hat to that statement mate. Well said.

[WILDTRAKPX2]

Originally Posted by Fairlane

Just on the accesories thing, say you buy a Fairlane for 56 including ORC, drive away, come back the following day and option it up you would avoid the luxury car tax?

Hopefully Ratt can shed some light on that one.

[russellw]

Originally Posted by Shockwave XR8

Hopefully Ratt can shed some light on that one.

You'd have to come back and do it some statutory time later (I belive it's 14 days) or as a non original purchase addition. For example, tint added afterwards would not attract the LCT but fitted prior to sale would.

Cheers
Russ

[WILDTRAKPX2]

I heard on Sky News this afternoon, they will be targeting $70k+ purchases so that does show a bit of common sense has prevailed.

[Ringo]

This will be a simple matter of looking or people who have purchased $70k car but then say on there tax return that their taxable income is only $35K.....

There is tax minimisation and then there is tax evasion.

---------------------------------------------------------------

At the prestige dealership I used to work at sometimes we would register the car and then fit the accesories. It depended on how many 'dealer fit' stuff was being done. It wasn't common practice.

I believed it was used at times to undercut opposition prices and get a signature on the sales contract. "We can do you a special deal" type of thing....

[Outbackjack]

LCT is one of the gov's most rediculous laws. I have friends with Toyota troop carriers that attract LCT. What a joke!! Just because you add off road accesories the gov want money!!! Thieves.

Originally Posted by EA2BA

The options where to be fitted after the fact as an extra, not as part of original invoice, so you would pay for the car invoice, then pay for the kit invoice later.

That's only if the customer specifies a seperate invoice, which really does not happen.

Originally Posted by Outbackjack

LCT is one of the gov's most rediculous laws. I have friends with Toyota troop carriers that attract LCT. What a joke!! Just because you add off road accesories the gov want money!!! Thieves.

No commercial vehicles attract LCT, nor does the stamp duty rise once the vehicle is over $45000 (in NSW).

[Thunder]

Someone please clarify if i am being dumb and stupid BUT...

...dont you pay the tax AT THE DEALER when you buy a new car over $55000 automaticaly?

Or are they refering to people who have "convinced" their dealer to not charge them tax cause they paid cashmoney? :ticking:

[Outbackjack]

Originally Posted by RATT

No commercial vehicles attract LCT, nor does the stamp duty rise once the vehicle is over $45000 (in NSW).

Thats is true, but a 5 seat Troopy is not considered a commercial vehicle. There some kind of formula that the ATO applies. The number of seats compared to the amount of storage area.

[WILDTRAKPX2]

Originally Posted by Thunder

Someone please clarify if i am being dumb and stupid BUT...

...dont you pay the tax AT THE DEALER when you buy a new car over $55000 automaticaly?

Or are they refering to people who have "convinced" their dealer to not charge them tax cause they paid cashmoney? :ticking:

Yes, you pay the tax at time of purchase whether you pay by cash, finance, cheque, credit card or whatever.

What they are doing is: if you have purchased a vehicle over $70K, the tax office then check your declared income to see if you can actually afford it. If your income is deemed too low, they will then take it further by way of audit etc.

[Thunder]

Originally Posted by Shockwave XR8

Yes, you pay the tax at time of purchase whether you pay by cash, finance, cheque, credit card or whatever.

What they are doing is: if you have purchased a vehicle over $70K, the tax office then check your declared income to see if you can actually afford it. If your income is deemed too low, they will then take it further by way of audit etc.

Oh bloody hell......better quickly go sell the Lambo! :

Dirty rotten bastards!

[Iphido]

actually I think this has something to do with that guy that was found dead who owned that Luxury car dealership that was doing dodgy things with lambos and porsches (he owned a top of the line Cayaene thing)..

There was some way dodgy guys could launder money thought it or pay no tax by buying them. The details escape me now.

Apparently it was wide spread with hundreads and possibly many dealers involved.

[smooth operator]

After reading the above posts, I have one piece of advice. before anyone makes a decision in relation to purchasing a vehicle such as an FPV (most of these do attract luxury tax) you should seek some serious professional advise from your accountant.

I stress I would never take advise from a salesperson on such a serious matter unless I did my homework on this matter. Some sales staff struggle just specification on models, so dont rely on their limited knowledge.

Seek this information from your accountant, not your sales person. My research tells me that the threshold is $57,009 inclusive of GST and including accessories but excluding on road costs - ie registration, CTP and state stamp duty. From this point luxury tax is charged at 25%.

When a dealer is quoting vehicle he should always quote prices that include LCT and of course GST. For mine I thought is was a requirement at law to show all retail prices inclusive of GST and LCT.

If the dealer your are discussing your purchase is uncertain, find one who is fully versed. Adding accessories a week or so to your car at the dealer is not the answer. It may be considered as a contrived situation by the ATO and therefore penalties for all may be applied.

If you are not sure seek appropriate advise from a professional. It is as much your responsibility as it is the dealers. At law ignorance is not a suitable defence!