Motor Vehicle Expenses - leased motor vehicle no longer used for work related purposes

Is a deduction allowable under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for lease expenses incurred by the taxpayer for a leased motor vehicle after the taxpayer has ceased using the motor vehicle for work related purposes?

No, a deduction is not allowable under section 8-1 of the ITAA 1997 for lease expenses incurred by the taxpayer for a leased motor vehicle after the taxpayer has ceased using the motor vehicle for work related purposes.

It was a condition of the taxpayer's employment that they own and maintain a motor vehicle for work purposes.

The taxpayer acquired a motor vehicle on a finance lease and made regular lease payments.

The taxpayer used the motor vehicle for work purposes until their employment conditions changed and they were no longer required to own and maintain a motor vehicle for work purposes.

The taxpayer retained the motor vehicle but no longer used it for work related purposes.

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

Although the taxpayer acquired the motor vehicle for work related purposes, the motor vehicle is no longer required to be used for that purpose. The expenses are no longer incurred in gaining or producing assessable income and are also private in nature. The taxpayer therefore cannot claim a deduction under section 8-1 of the ITAA 1997 for the lease expenses incurred after they cease using the motor vehicle for work related purposes.