Yes. A business owner can claim motor vehicle expenses even when the registration is in someone else’s name, provided a private arrangement makes them the real owner of the vehicle. The ATO states you do not have to be the registered owner. What matters is who paid for the vehicle and who uses it to earn income.
It is one of the most common questions we get asked, and it almost always arrives the same way: the client has bought a ute or a van, paid for it out of their own pocket, uses it every day for work, and then notices the registration papers have a different name on them. A spouse. A parent. A former business partner. The immediate assumption is that the deduction is gone.
It usually is not. This article explains what the ATO actually requires, what evidence you need, how the deduction is calculated once ownership is established, and the traps that turn a valid claim into an audit problem. It is written by Mina Baselyous, a Chartered Tax Advisor (CTA), Certified Practising Accountant (CPA) and Registered Tax Agent who deals with this exact issue across a Melbourne client base every tax season.
Why the Registration Certificate Is Not the Test
A registration certificate records who the vehicle is registered to for road-use purposes. It is not a title deed and it does not decide who owns the vehicle for tax. Ownership is decided by who acquired the vehicle and who bears the cost of it. That is why the name on the rego papers, on its own, neither creates nor destroys a deduction.
This catches people out because registration feels official. It is issued by a state authority, it has your details on it, and it sits in the glovebox looking like proof of ownership. But state road authorities register the person responsible for the vehicle on the road. The tax question is a different one: did you incur this cost, and did you incur it in earning your assessable income.
In practice, says Mina Baselyous (CPA, CTA, Registered Tax Agent), the mistake we see most is a business owner quietly dropping a legitimate claim because of a piece of paper that was never the deciding factor in the first place.
What the ATO Actually Says About Cars You Do Not Own on Paper
The ATO’s published position is explicit. Its 2026 individual tax return instructions state that you do not have to be the registered owner of a car, but if you are not, you need to show that a private arrangement made you the owner or lessee. Once you can show that, you work out your claim exactly as if the car were registered in your own name.
The ATO goes further and gives a worked example of a person who bought a car from a parent, pays all the running costs, and is the only person who drives it. The registration was never transferred and remains in the mother’s name. The ATO accepts the claim, because the private arrangement made the daughter the owner. You can read the full position on the ATO’s page covering expenses for a car you own or lease (current as at October 2026).
There is one important exclusion. A car provided under a salary sacrifice or novated lease arrangement is not a car you own or lease, and the running costs are not yours to claim. That is a genuinely different situation from paying for a vehicle yourself and leaving the registration unchanged.
What Counts as Proof That You Are the Real Owner
Because the position rests on substance rather than the certificate, the paper trail does the work. The ATO will not take the arrangement on trust in an audit, so the evidence needs to exist before the claim is made, not be reconstructed afterwards. The stronger and more contemporaneous the record, the easier the conversation.
What we ask clients to produce:
- The purchase invoice or contract of sale for the vehicle, ideally naming you as the buyer.
- Bank statements, loan documents or finance contracts showing the purchase price came from you or from your business.
- Evidence that you bear the ongoing costs: fuel, insurance, servicing, tyres and registration renewals.
- Evidence of who actually uses the vehicle, and for what.
- A short written acknowledgement from the registered person confirming that you are the owner, signed and dated.
That last point is the one most owners skip and the one that costs them. A single page, signed at the time, converts an arguable position into a documented one. It takes ten minutes and it is the difference between a claim that holds and a claim that becomes a negotiation.
Not sure whether your vehicle claims would survive an ATO review?
At Pinnacle, we help Melbourne business owners structure vehicle ownership properly so the deduction is defensible and the asset sits in the right entity. Book a consultation with Mina to find out where you stand.
Book a ConsultationHow the Deduction Is Worked Out Once Ownership Is Established
Once you are treated as the owner, the vehicle type decides the method. For a car, meaning a vehicle designed to carry a load under one tonne and fewer than nine passengers, there are two methods: cents per kilometre, or the logbook method. For anything outside that definition, neither method applies and you claim the business portion of your actual running costs instead.
Cents per kilometre
The rate is set each year by legislative instrument. For the 2026-27 income year the rate is 91 cents per kilometre, set by the Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026, registered on the Federal Register of Legislation on 23 June 2026. For 2025-26 the rate was 88 cents. Either way the method is capped at 5,000 business kilometres per car per year, which is a hard ceiling of $4,550 for 2026-27. Our guide to the ATO cents per km rate for 2026-27 sets out how the rate is applied.
Logbook method
A twelve-week logbook establishes a business-use percentage that then applies to every running cost: fuel, insurance, servicing, interest on the finance, and the decline in value of the vehicle. The logbook is valid for five years unless the pattern of use changes. For a vehicle doing real business kilometres, this method is almost always the larger claim, and it is the only one that lets you deduct depreciation.
Utes, vans and vehicles that are not cars
A one-tonne ute, a large van or a motorcycle is not a car for these purposes. The two methods above are unavailable. You claim the business proportion of actual costs, supported by receipts and a reasonable basis for the business-use percentage. Most owners still keep a logbook-style record, because it is the simplest way to evidence the split.
Where Business Owners Get This Wrong
The ownership question is usually the easy part. The errors that cause real damage sit around it, and they tend to surface only when the ATO asks a question or when the vehicle is sold. These are the four we see most often across our client base.
- Two parties claiming the same vehicle. If the registered person has claimed anything on the vehicle, even a portion of the running costs, that has to be unwound before you lodge. Only one taxpayer can hold the asset.
- Claiming depreciation without solid ownership evidence. Decline in value can only be claimed by the holder of the asset, and in most cases that is the legal owner. Running costs are more forgiving than depreciation, so the evidence bar for depreciation is higher.
- Ignoring the fringe benefits tax angle. If the registered owner is a company or a trust rather than a family member, the arrangement can look like a vehicle being made available to an employee or associate. That is an FBT question and it needs to be worked through before the position is locked in.
- Buying the vehicle in the wrong entity in the first place. Registration is fixable. Putting a significant asset in an entity that has no business use for it, or that exposes it to creditors, is a structuring problem that costs far more than the deduction.
Vehicle claims also sit squarely inside the ATO’s compliance focus. We have written separately about the ATO crackdown on personal versus business deductions, and motor vehicles feature in it every year because the private-use split is so easy to overstate.
What to Do If Your Vehicles Are Registered in the Wrong Name
Deal with it now rather than at lodgement. Gather the purchase invoices and payment evidence, put a signed acknowledgement of ownership in place, confirm nobody else has claimed the vehicle, and start a logbook if one does not exist. Then decide whether the registration should simply be transferred, which is usually the cleanest answer.
The bigger question is whether the vehicle is in the right entity at all. For an established business, a work vehicle is rarely just a deduction. It is an asset sitting somewhere in your structure, exposed to whatever risks that entity carries, and it will eventually be sold with tax consequences attached. That is the conversation worth having, and it is the one most compliance-only accountants never start. Our complete guide to small business tax deductions covers where vehicles fit alongside the rest of your claims, and the tax planning work is where the structural decisions get made.
Frequently Asked Questions
Can I claim car expenses if the registration is in my wife’s name?
Yes, provided a private arrangement makes you the owner of the car. The ATO does not require you to be the registered owner. You need to show you bought the vehicle, you bear the running costs, and you use it to earn income. Keep the purchase invoice, payment evidence and a signed acknowledgement of ownership.
Does paying the invoice for a vehicle make me the owner for tax purposes?
Paying for the vehicle is strong evidence of ownership, but it is not conclusive on its own. The ATO looks at the whole arrangement: who paid, who bears the running costs, who has possession, and who uses it. A gift or a loan to another person is a different arrangement from a purchase for yourself.
Can my company claim a vehicle that is registered in my personal name?
It can, if the company genuinely acquired and paid for the vehicle. The complication is fringe benefits tax: a company vehicle made available to a director or employee for private use generally triggers an FBT liability. The registration mismatch also weakens the company’s ownership evidence, so this needs advice before it is lodged.
What happens if both my spouse and I claim the same car?
Only one taxpayer can claim a vehicle they hold, and double claiming will not survive an ATO review. If both parties have lodged claims on the same vehicle, the returns need to be amended before any further claim is made. Work out which party is the genuine owner and correct the other return.
Can I claim depreciation on a vehicle that is not registered in my name?
Decline in value can only be claimed by the holder of the asset, and the ATO treats the legal owner as the holder in most cases. So the evidence bar is higher for depreciation than for running costs. If you want to claim depreciation, make sure the purchase documents and payment trail clearly establish you as the owner.
Should I just transfer the registration into my own name?
In most cases yes, because it removes the argument entirely and costs very little. Check the transfer duty and any finance restrictions first, since a vehicle under finance may need the lender’s consent. Until the transfer happens, a signed acknowledgement of ownership from the registered person protects the claim.
General Advice Disclaimer: The information in this article is general in nature and does not constitute personal financial, tax, or legal advice. It has been prepared without taking into account your personal objectives, financial situation, or needs. Before acting on anything in this article, consider its appropriateness to your circumstances and seek advice from a registered tax adviser or CPA. Liability limited by a scheme approved under Professional Standards Legislation.
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