Document ID: chunk:federal_register_of_legislation:C2014C00703:clause:4_3:p1
Version: federal_register_of_legislation:C2014C00703
Segment Type: clause
Provision Reference: sch 4 cl 3 (pt 1/3)
Character Range: 213970–216696

3                                                     R&D entity                                                                                                                           R&D partnership

Notional deduction
 (3) If the R&D partnership could deduct for the event year an amount under subsection 40‑285(2) of the new Act for:
 (a) the asset; and
 (b) the event;
if Division 40 of that Act applied as described in subsection (2) of this section, the partner is taken to be able to deduct under subsection 355‑525(2) of the new Act the partner's proportion of that amount for the event year.
Note: The partner may be entitled to a tax offset under section 355‑100 (about R&D) of the new Act for the deduction.

Amount to be included in assessable income
 (4) If an amount (the section 40‑285 amount) would be included in the R&D partnership's assessable income for the event year under subsection 40‑285(1) of the new Act for the asset and the event if Division 40 of that Act applied as described in subsection (2) of this section, the sum of:
 (a) the partner's proportion of that amount; and
 (b) the following amount;
is taken to be included in the partner's assessable income for the event year under subsection 355‑525(3) of the new Act:
where:
adjusted section 40‑285 amount means so much of the section 40‑285 amount as does not exceed the total decline in value.
old law 1.25 rate deductions means the sum of the partner's notional Division 40 deductions, and notional Division 42 deductions, (if any) for the asset that were multiplied by 1.25 in working out the old law deductions.
total decline in value means the asset's cost, less its adjustable value, worked out under Division 40 of the new Act as it applies as described in subsection (2).

Normal rules do not apply for the asset and the event
 (5) Neither of the following sections:
 (a) section 355‑525 of the new Act;
 (b) former section 73BF of the old Act (as that section applies because of Part 2 of Schedule 4 to the Tax Laws Amendment (Research and Development) Act 2011);
to the extent that they would otherwise apply apart from this section to the partner for the event, do so apply to the partner for the event.
Note 1: Section 355‑525 of the new Act would otherwise apply for the event in a case where the partner had new law deductions.
Note 2: Former section 73BF of the old Act may otherwise apply for the event in respect of the old law deductions.

355‑340  Balancing adjustment—tax exempt entities that become taxable
  Item 7 of the table in subsection 57‑110(2) in Schedule 2D to the Income Tax Assessment Act 1936 applies as if the deduction rules set out in the final column of that item also included former sections 73BA