Document ID: chunk:federal_register_of_legislation:C2005C00282:clause:2_73bj
Version: federal_register_of_legislation:C2005C00282
Segment Type: clause
Provision Reference: sch 2 cl 73BJ
Character Range: 16025–18143

73BJ  Meaning of notional Division 42 deduction

Notional Division 42 deduction

 (1) An eligible company has a notional Division 42 deduction for a year of income for a unit of section 73BH plant if it would be entitled to a deduction for the plant under section 42‑15 of the Income Tax Assessment Act 1997 for the year of income assuming the changes set out in this section were made.

First change: replacement of references to use or installation ready for use for purpose of producing assessable income

 (2) The first change is that references in Division 42 of the Income Tax Assessment Act 1997 to using the unit, or having it installed ready for use, for the purpose of producing assessable income are instead references to using the unit for the purpose of the carrying on by or on behalf of the eligible company of research and development activities.

Second change: method for calculating deduction where previous Division 42 deduction

 (3) The second change is that, if the eligible company was actually entitled to a deduction under Division 42 of the Income Tax Assessment Act 1997 for the unit of section 73BH plant for any period before the start of the first period for which the company will be entitled to a deduction for the plant under this subsection, the same method for calculating the deduction as the company was using for the unit for the earlier period is used.

Third change: treatment of expenditure to which section 73BK or 73BL applies

 (4) The third change is that, in working out the cost of the unit of section 73BH plant, any amount of expenditure (section 73BH plant expenditure) that would otherwise form part of that cost is to be ignored or treated in some other way if section 73BK or 73BL so provides for the purposes of this section.

Fourth change: certain provisions to be ignored

 (5) The fourth change is that Division 42 of the Income Tax Assessment Act 1997 applies as if section 73BH of this Act and Subdivisions 42‑L and 42‑M of that Act had not been enacted.

Definition

 (6) In this section:

section 73BH plant has the meaning given by section 73BI.