Preamble
No. An estimated market value of a motor vehicle cannot be used to calculate depreciation expenses.
Depreciation expense is to be calculated from the date of purchase using the actual purchase price. The cost limit for motor vehicles (section 57AF) will apply for the relevant year of purchase.
This would also apply to the situation where a motor vehicle is used privately then used for business at a later date. Example 1 : A motor vehicle is purchased on 1/7/91 for $20000 and used for business purposes from the date of purchase. The depreciation expense is calculated on $20000 for the full year. Example 2 : If the same vehicle was used privately from date of purchase then used for business purposes from 1/7/92 the depreciation is calculated using the original purchase date and the original purchase price. 20000 x 22.5% = 4500 (notional depreciation for first year of ownership - not deductible) (20000 - 4500) x 22.5% = 3488 (depreciation for first year of business use) Example 3 : Another vehicle is purchased on 1/7/91 for $50000 and used privatly from date of purchase, then used for business purposes from 1/7/92. The depreciation limit for the year of purchase is to apply. Purchase price is $50000. Depreciation limit for the 1992 year is $45462. 45462 x 22.5% = 10229 (notional depreciation for first year of ownership - not deductible) (45462 - 10229) x 22.5% = 7927 (depreciation for first year of business use)