Document ID: chunk:federal_register_of_legislation:C2005C00282:clause:2_73bg
Version: federal_register_of_legislation:C2005C00282
Segment Type: clause
Provision Reference: sch 2 cl 73BG
Character Range: 72316–74327

73BG  Effective life calculation under Division 40 of Income Tax Assessment Act 1997 to take into account use for purpose of carrying on research and development activities

 (1) This section has effect for the purposes of working out, under sections 40‑100, 40‑105 and 40‑110 of the Income Tax Assessment Act 1997 (whether in their application for the purposes of section 73BA of this Act or otherwise), the effective life of a depreciating asset of an eligible company.

 (2) If, at the time at which the effective life is worked out, it is reasonably likely that the depreciating asset will be used at some time by any eligible company for the purpose of the carrying on by or on behalf of the eligible company of research and development activities:
 (a) the references in:
 (i) item 1.1 of the table in section 40‑10 of the Income Tax Assessment Act 1997 to the period the asset can be used to produce income; and
 (ii) sections 40‑100, 40‑105 and 40‑110 of that Act to the period the asset can be used by any entity for a taxable purpose or for the purpose of producing exempt income;
  include a reference to the period the asset can be used by any eligible company for the purpose of the carrying on by or on behalf of the eligible company of research and development activities; and
 (b) in applying paragraph 40‑100(4)(c) and subsection 40‑105(2) of the Income Tax Assessment Act 1997, it is to be concluded that no eligible company that can use the asset for the purpose of the carrying on by or on behalf of the eligible company of research and development activities will scrap the asset, will sell it for scrap value or less or will abandon it, for reasons attributable to technical risk in the carrying on of those activities.

 (3) In this section:

depreciating asset has the same meaning as in Division 40 of the Income Tax Assessment Act 1997.

eligible company has the same meaning as in section 73B.

research and development activities has the same meaning as in section 73B of this Act.