GST claim on private vehicle purhase.
Submitted: Sunday, Jul 08, 2007 at 18:46
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dave_c
gday all,
i was told today that i can not claim gst when buying a used vehicle. being that the vehicle will be bought through my company, i thought this odd. If this is true, why would anyone who is gst registered, bother buying anything other than a dealer used vehicle. Is there anyone clued up in this area who can clarify this please.
cheers dave
Reply By: fisho64 - Sunday, Jul 08, 2007 at 19:17
Sunday, Jul 08, 2007 at 19:17
your post is a little unclear? Are you talking about buying a private used vehicle? If so then there is no GST charged by the seller as he is not GST registered. Therefore there is no GST for you to claim on? So it comes back to the same thing as buying as a private person. Yopu can buy private , or a dealer used vehicle at a premium with a warranty, plus GST that you can claim back if you are registered to claim it.
Correct me if I have misunderstood your post, but it isnt quite clear what you are asking?
AnswerID:
251371
Follow Up By: dave_c - Sunday, Jul 08, 2007 at 19:45
Sunday, Jul 08, 2007 at 19:45
gday fisho64,
yes, im interested in a car which is privately owned. im trying to point out that if i cant claim gst, am i better to buy from dealer. if the two cars have the same bottom line i save 10% buying the dealer car. does this mean private car sellers are over pricing??. What if we are both registered can i claim?
hope this is clearer.
cheers dave
FollowupID:
512505
Follow Up By: Mick - Sunday, Jul 08, 2007 at 20:24
Sunday, Jul 08, 2007 at 20:24
If both seller and buyer are registered for GSt and the seller provides a Tax Invoice with his ABN, then you can include that GST in your next Business Activity Statement as GST paid. You then calculate how much GST your business has collected and how much it has paid and that's what determines whether you get some back :)) or pay some more :((
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512512
Follow Up By: fisho64 - Sunday, Jul 08, 2007 at 23:38
Sunday, Jul 08, 2007 at 23:38
spot on Mick, you beat me and explained better!
But Dave, if a private seller and a dealer have 2 (hypothetically) identical vehicles for sale at the same price (forget the GST for now) then yes it is too dear as dealer usually must offer warranty.
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512537
Reply By: Gerhardp1 - Monday, Jul 09, 2007 at 16:03
Monday, Jul 09, 2007 at 16:03
This is an extract from the ATO web site
Purchasing a second-hand motor vehicle
If you purchase a second-hand motor vehicle from someone who is not registered for GST and you are purchasing the vehicle in order to sell or exchange it, you may be entitled to claim a GST credit. If the cost of the vehicle is more than $300, you can claim the GST credit when you sell the vehicle, provided the sale of the vehicle by you is a taxable sale. The credit is the lesser of:
* one-eleventh of the amount you paid for the vehicle, or
* the amount of GST payable when the vehicle is sold.
If you purchase a second-hand vehicle from someone who is not registered for GST and you don’t plan to sell or exchange the vehicle, you cannot claim a GST credit.
Site Link
AnswerID:
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Follow Up By: Mikee5 (QLD) - Tuesday, Jul 10, 2007 at 13:05
Tuesday, Jul 10, 2007 at 13:05
Just so there is no confusion, the terms 'in order to sell or exchange it' refer to 'trading stock' ie buying, selling, trading cars, as opposed to 'capital assets' which you hold and depreciate. Obviously in the long term you intend to sell or trade the vehicle, that is outside the meaning here. Division 66 of the GST Act refers, also if you claim the Div 66 credit on the purchase, you can only do at the time you sell and only if you sell for more than you pay, ie you pay 1/11th of the profit on the deal (unless the purchase price is under $300 (Div 66A) or you apply global pooling (Div 66B) to your stock). Same rules apply to any second hand goods, eg pawn brokers, used furniture, scrap metal etc. Cheers.
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512759
Reply By: Col88 - Monday, Jul 09, 2007 at 17:16
Monday, Jul 09, 2007 at 17:16
SA is spot on. If you gain from the disposal of your current vehicle, it is the property of the business and is treated like any other sale of goods or
services. You will have to pay GST. Even if you trade it in, so keep that in mind as that figure includes GST which you will pay to ATO.
It would be as obvious as hell, but could you buy the car from the business for $1, pay the GST and trade it as private?
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Follow Up By: Mikee5 (QLD) - Monday, Jul 09, 2007 at 19:00
Monday, Jul 09, 2007 at 19:00
Col, sorry but that is called a non-arms-length transaction and you must give the ATO the GST on the value not the cost. Nice try but they already thought of that one.
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Follow Up By: Col88 - Monday, Jul 09, 2007 at 21:49
Monday, Jul 09, 2007 at 21:49
Maybe if I sold it to my neighbour :-))
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