The Luxury Car Limit and the Depreciation Worksheet in HandiTax
This article sets out how to enter the details for a motor vehicle, with a value that exceeds the luxury motor vehicle limit and uses the diminishing value depreciation method, in the depreciation worksheet.
Entering the figures in the worksheet
In the example below a motor vehicle has been purchased for $150 000, which exceeds the luxury motor vehicle limit. The motor vehicle will be depreciated using the diminishing value method.
Enter the total value of the motor vehicle in Total Cost.
Enter the luxury motor vehicle limit amount in Acquisition Cost under Additions together with the Acquisition Date.
Click Here for the current luxury car tax rate and thresholds
Notes:
If you are using the Prime Cost method of depreciation, the program uses the Total Cost figure to determine the Decline in Value figure. To override the automatic Decline in Value calculation, enter your manually calculated figure at Decline in Value.
If you are using the Diminishing Value method of depreciation, the program uses the Opening Written Down figure to determine the Decline in Value figure. To override the automatic Decline in Value calculation, enter your manually calculated figure at Decline in Value.
For information on how to enter a luxury car when the allowable depreciation amount is less than the cost into HandiLedger click here.