Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 1/18)
Character Range: 5182670–5185500

2                                          section 355‑315                                             the purpose of conducting one or more of the *R&D activities to which the R&D deductions (within the meaning of that section) relate

Note: Sections 40‑100, 40‑105 and 40‑110 are about working out an asset's effective life. Those sections already refer to the use of the asset for R&D activities.
 (3) Secondly, assume that Division 40 does not apply to a building, nor to an extension, alteration or improvement to a building, (the building works) for which the *R&D entity:
 (a) can deduct amounts under Division 43 (capital works); or
 (b) could deduct amounts under Division 43:
 (i) apart from expenditure being incurred, or the building works being started, before a particular day; or
 (ii) had the R&D entity used the building works for a purpose relevant to those building works under section 43‑140 (using an area in a deductible way).
 (4) Finally, assume that the following provisions had not been enacted:
 (a) subsection 40‑25(7) (meaning of taxable purpose);
 (b) subsection 40‑45(2) (assets to which Division 40 does not apply);
 (c) section 40‑425 (low‑value pools);
 (d) Subdivision 328‑D (capital allowances for small business entities).
Note: Subsection (3) and paragraph (4)(b) mean that deductions under section 355‑305 may be available for capital works other than building works.

355‑315  Balancing adjustments—assets only used for R&D activities
 (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: