Business Use of Personal Vehicle
Sole Proprietorship Business Use of Spouse's Passenger Vehicle
I am the doing the bookkeeping for a sole proprietorship. He uses his wife's passenger vehicle for picking up inventory approximately 4-5 times a month. Each trip averages between 30-60 kms. He has kept all the vehicle-related receipts and a detailed log book.
The car is insured as a passenger vehicle in BC, so 6 or fewer business trips per month are allowable under this type of insurance by ICBC. The wife uses the car solely for pleasure (not at all for work or business). So my questions are these:
1) Do I enter his business related expenses the same as if he owned the car himself, or must I work out some type of leasing arrangement between them, where he repays her the business portion of the expenses (approx 20%).
2) His wife sold her old car and bought a new one this year. Am I correct in assuming that he can't claim any Capital Cost Allowance for the vehicles in question?
Take a look at Business Use of Your Personal Vehicle
Pay particular attention to the section on "Business Insurance for Your Personal Vehicle". To be safe, I like the business clause written on the policy and it should be clear that the policy allows him to drive it ... or ensure he has cleared it with ICBC as it is better to be safe than sorry.
I think you would be safe following the same rules as you suggested in #1... but if you aren't sure, phone CRA to see what they think.
In order to claim CCA, he would have had to have added the car as a business asset, each year allocating his business useage. This one I would check with CRA as the car is not in his name. Sorry I can't be more help.P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.