Not sure on the details, but it is apparently fairly cheap and easy to register a company of which say you and your partner could be the sole shareholders of.
Could you then use a company you had set-up like this to get business discounts from dealers on used cars? If dealers build a premium into their prices for the CGA then it should be possible to negotiate a discount if the CGA did not apply, such as if the sale was to a company.
What do you think, too much hassle, would there be any disadvantages to this such as for tax? Also insurance premiums for a vehicle owned by a company might be more I guess.
I am of the view that with a thorough pre-purchase inspection, the CGA protections are not much needed anyway.
kazbanz,
Aug 3, 12:10pm
mate--honestly its a waste of time/effort. Interesting concept. members of the public CHOOSING to opt out of their legal protections.
msigg,
Aug 3, 2:01pm
plenty of loopholes out there if your that way inclined, some more right than others, go and see your accountant and get some ideas if you can be bothered/or don't want to sleep at night.
brapbrap8,
Aug 3, 2:12pm
If you had a company then you would buy a new vehicle. Ideally a ute, claim the depreciation back and no fringe benefit tax to have it available for personal use.
captaink,
Aug 3, 2:36pm
Doesn't have to be a company, just has to be for business use. How does a 'company' buying a new vehicle not pay Fringe Benefit tax Brapbrap?
zak410,
Aug 3, 2:39pm
I thought CGA only applied to personal items, not for business. Is that correct regarding cars?
mojo49,
Aug 3, 2:50pm
The IRD are not stupid. I deal with them every week. Any attempt to register a business in any form for the sake of reducing personal expenses would show up in their system quite quickly. Ongoing compliance costs for the business would far outway any one off saving even if a dealer would play ball. kaz is spot on. Just get over it and buy what you can actually afford and protect yourself from an unpredictable future performance of any motor vehicle, even new.
joanie04,
Aug 3, 2:52pm
Not quite that straight forward. A good accountant will be up with the play. The government has nothing better to do than find ways to make businesses more compliant. Basically all it does for the majority is increase compliance costs and the ones they are trying to rein in will still find a way around things. One reason I no longer work from home is I just can't keep up to play with changes and elected to go back and work for a Chartered Accountant and let the partners sweat the hard stuff.
Edit to add, posted at the same time as mojo. What they say is right on the button.
captaink,
Aug 3, 3:23pm
Actually, it is that straight forward in respect of the CGA, any vehicle purchased for Business use then the CGA shall not apply. Nothing to do with the IRD, with being a Company, Contractor or anything else, IF you use the vehicle for business and declare it on VOSA, then the CGA does not apply. In respect of the OP, I don't know that there is any margin consciously added on to cover potential claims, I don't think the industry allows that luxury, but it may get you a discount on a marginal vehicle.
My other question was directly directed to brapbrap who seemed to have an answer to FBT on Company Vehicles presumably this is what is not so straight forward?
mojo49,
Aug 3, 4:09pm
You cant claim back depreciation unless a vehicle is actually used in a business. If you did not have a business and could get a discount via that proposed arrangement you would immediately on-sell it to yourself for private use. You cannot avoid FBT simply by saying it is a business vehicle and not available for private use 365 days a year and then use it privately 365 days a year. The scheme might work to get a reduced price by opting out of the CGA under a business arrangement. The rest of it is rubbish as far as any tax advantages goes. It would be deemed to be "an arrangement for the purposes of avoiding tax" and is illegal and carries the same penalties as tax evasion.
brapbrap8,
Aug 3, 4:44pm
Commercial vehicles like utes, vans or light trucks do not pay fringe benefit tax when owned by a business like cars or other vehicles do.
That is why there are so many new utes on the road belonging to companies who you wouldn't think need a ute. A company owning a flash VW Amarok would be about $10k a year in tax better off than a company owning an SUV of similar value like a Landcruiser Prado for example.
curlcrown,
Aug 3, 7:07pm
So you want to be a wholesaler and get a pre purchase inspection?
curlcrown,
Aug 3, 7:18pm
And what would you do if the engine blew on the way home from buying the car?
edbabynz,
Aug 4, 5:36am
You would claim on the warranty.
tgray,
Nov 23, 7:38pm
The last two Swifts I sold, went to dealers and the sale price was the same, no matter who you are.
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