Hi there,
Following on from this thread:
http://www.somersoft.com/forums/showthread.php?t=51916
My car game plan now is to get a variable interest only loan secured againt surplus RIP equity to purchase a car for business use (90% business use, 10% private use).
As I have an ABN, I am eligible for the 50% investment allowance (which finishes in Dec this year).
I'll buy a new car (or demo model...needed to use the 50% allowance), ideally under the $57,180 luxury car tax threshold (to maximise the benefit of the 50% allowance), but it will probably be a little bit over this eg. 60-62k for what I am looking at.
With the 50% investment allowance on top of normal depreciation, tax deductible interest payments and vehicle maintenance/running expenses, GST refund on first BAS, surplus cash being used to pay non-deductible debts eg. PPOR loans (rather than deductible ones)...
Based on my calculations... the car will be cash flow positive by a small amount for the first 5 years!!!
In 5 years time I can sell the car and pay out the remaining loan with cash and repeat the process all over again (buying a car that holds its value well would be better for this), or continue paying interest only payments on the car and keep the car (as depreciation would have run out by now there will be a small after-tax holding cost for the car from now on), or pay the loan out with cash and keep the car.
Regardless of which end path I chose, I'm confident my financial position in 5 years time will be able to handle it.
So the seemingly un-thinkable...ie. cash flow positive cars, appears to be a realistic possibility!!!
Can anyone see any flaws in this?
I think there may be some FBT implications, but am not sure how significant they really are??
Thanks.
Following on from this thread:
http://www.somersoft.com/forums/showthread.php?t=51916
My car game plan now is to get a variable interest only loan secured againt surplus RIP equity to purchase a car for business use (90% business use, 10% private use).
As I have an ABN, I am eligible for the 50% investment allowance (which finishes in Dec this year).
I'll buy a new car (or demo model...needed to use the 50% allowance), ideally under the $57,180 luxury car tax threshold (to maximise the benefit of the 50% allowance), but it will probably be a little bit over this eg. 60-62k for what I am looking at.
With the 50% investment allowance on top of normal depreciation, tax deductible interest payments and vehicle maintenance/running expenses, GST refund on first BAS, surplus cash being used to pay non-deductible debts eg. PPOR loans (rather than deductible ones)...
Based on my calculations... the car will be cash flow positive by a small amount for the first 5 years!!!
In 5 years time I can sell the car and pay out the remaining loan with cash and repeat the process all over again (buying a car that holds its value well would be better for this), or continue paying interest only payments on the car and keep the car (as depreciation would have run out by now there will be a small after-tax holding cost for the car from now on), or pay the loan out with cash and keep the car.
Regardless of which end path I chose, I'm confident my financial position in 5 years time will be able to handle it.
So the seemingly un-thinkable...ie. cash flow positive cars, appears to be a realistic possibility!!!
Can anyone see any flaws in this?
I think there may be some FBT implications, but am not sure how significant they really are??
Thanks.
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