FAQ: What effect does Luxury Car Tax (LCT) have on a Novated Lease?
What effect does Luxury Car Tax (LCT) have on a Novated Lease?
Vehicles with a purchase price greater than the Luxury Car Tax Limit (currently $57,466.00 for Financial Year 2011-12) attract Luxury Car Tax (LCT) in addition to GST. Luxury Car Tax (LCT) is included in the total cost of the vehicle and therefore influences your monthly payment under a Novated Lease.
Additionally, the Luxury Car Tax Limit determines the maximum Input Tax Credit claimable by the finance company when your vehicle is purchased. This means that if you salary package a vehicle that costs more the Luxury Car Tax Limit, you will not receive a credit for all of the GST included in the vehicle's price.
Leasing a luxury vehicle has a range of tax implications and should be discussed with your financial adviser or accountant.
Please note that this information is of a general nature only. You should consult an accountant to obtain information specific to your situation.
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What effect does Goods and Services Tax (GST) have on a Novated Lease?
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