22 May 099 On demonstrator vehicles and the Tax BreakMEMBER 7 writes:
"It is always interesting to see Treasury's manipulation of the English language - most people would think a new asset would certainly include assets that have not previously been sold.
However when you apply Treasury's concept of new to demonstrator vehicles you discover that is not the case: "Demonstrator vehicles can qualify as 'new' assets provided they have only been used for reasonable testing and trialling." What does this mean in practice?
An example from the Explanatory Memorandum would indicate that it will almost be impossible for a demonstrator vehicle to ever pass this "new" test:
Example 1.5 : Belinda is contemplating the purchase of a 'demonstrator' vehicle from a dealer for $25,000 to use in her business. Although the dealer had acquired the car new from the factory, he would regularly use the car to drive to and from work. The prior use by the car dealer does not constitute reasonable testing and trialling of the car. Therefore the car is not considered new and Belinda would not be eligible to claim the Tax Break for the car.
How many clients will buy demonstrator vehicles only to discover that because they don't share Treasury's version of a dictionary they won't obtain the tax break?"