INCOME TAX ASSESSMENT ACT 1997 - SECT 355.315 Balancing adjustments--assets only used for R&D activities

INCOME TAX ASSESSMENT ACT 1997 - SECT 355.315

  (1)   This section applies to an * R&D entity if:

  (a)   a * balancing adjustment event happens in an income year (the event year ) for an asset * held by the R&D entity; and

  (b)   the R&D entity cannot deduct an amount under section   40 - 25, as that section applies apart from:

  (i)   this Division; and

  (ii)   former section   73BC of the Income Tax Assessment Act 1936 ;

    for the asset for an income year; and

  (c)   the R&D entity is entitled under section   355 - 100 to * tax offsets for one or more income years for deductions (the R&D deductions ) under section   355 - 305 for the asset; and

  (d)   the entity is registered under section   27A of the Industry Research and Development Act 1986 for one or more * R&D activities for the event year; and

  (e)   if Division   40 applied with the changes described in section   355 - 310:

  (i)   the entity could deduct for the event year an amount under subsection   40 - 285(2) for the asset and the balancing adjustment event; or

  (ii)   an amount would be included in the entity's assessable income for the event year under subsection   40 - 285(1) for the asset and the balancing adjustment event.

Note 1:   This section applies in a modified way if the entity also has deductions for the asset under former section   73BA or 73BH of the Income Tax Assessment Act 1936 (see section   355 - 320 of the Income Tax (Transitional Provisions) Act 1997 ).

Note 2:   Section   40 - 292 applies if the entity can deduct an amount under section   40 - 25, as that section applies apart from this Division and former section   73BC of the Income Tax Assessment Act 1936 .

  (2)   If the * R&D entity could deduct for the event year an amount under subsection   40 - 285(2) for the asset and the event if Division   40 applied as described in paragraph   (1)(e), the R&D entity can deduct that amount for the event year.

Note 1:   A deduction under this subsection is not a notional deduction (see subsection   355 - 105(2)).

Note 2:   A deduction under this subsection results in a catch up amount for the R&D entity (see section   355 - 465).

  (3)   If an amount would be included in the * R&D entity's assessable income for the event year under subsection   40 - 285(1) for the asset and the event if Division   40 applied as described in paragraph   (1)(e), that amount is included in the R&D entity's assessable income for the event year.

Note:   Some or all of the amount included in the R&D entity's assessable income may result in a clawback amount for the R&D entity (see section   355 - 446).

Table of sections

355 - 400   Expenditure incurred while not at arm's length

355 - 405   Expenditure not at risk

355 - 410   Disposal of R&D results

355 - 415   Reducing deductions to reflect mark - ups within groups