Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_5:p1
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 5 (pt 1/2)
Character Range: 625625–628466

5                            A partnership owns the item and:

                             (a) the interests of the partners in the partnership change; and

                             (b) a partner that owned the item (alone or with others) immediately before the change in interests still has an interest in the item immediately afterwards; and

                             (c) the change in interests does not involve a disposal of the item nor its transmission to another entity by operation of law.

For partial realisations: see Subdivision 373‑C.

For transmissions by operation of law: see subsection 373‑20(2).

Note: An example of item 4 is if the owner of a copyright becomes a partner and contributes the copyright to the partnership assets.

 (3) A balancing adjustment is not required if roll‑over relief is available under Common rule 1.

For the application of Common rule 1: see Subdivision 373‑E.

 (4) A balancing adjustment is not required if the item relates to a copyright in an Australian film within the meaning of Division 10B of Part III of the Income Tax Assessment Act 1936.

Note: In that case, see that Division.

373‑65  How to do the adjustment

 (1) You make the adjustment by comparing:

 • the item's *termination value;

with:

 • the item's *written down value.

 (2) If the *termination value exceeds the *written down value, the excess is included in your assessable income. However, the amount included cannot be more than:

 • the total of the amounts (if any) you have deducted or can deduct for earlier income years under Subdivision 373‑B for your *expenditure on the item;

less:

 • the total of each amount (if any) that section 373‑50 has included in your assessable income for an income year because of a *partial realisation of the item.

Note 1: If roll‑over relief under Common rule 1 has previously applied to the item: see section 41‑40 and subsections 373‑85(3) and (4).

Note 2: If you have owned the item since before the 1998‑99 income year: see subsection 373‑10(4) of the Income Tax (Transitional Provisions) Act 1997.

Note 3: If there has been an earlier balancing adjustment event for which roll‑over relief was available under section 124PA of the Income Tax Assessment Act 1936: see section 373‑65 of the Income Tax (Transitional Provisions) Act 1997.

 (3) If the *termination value is less than the *written down value, you can deduct the difference.

Note: The deduction may be reduced if you obtain a benefit from a right you can exercise outside Australia: see section 373‑90.

 (4) Your *unrecouped expenditure on the item is reduced to nil at the time of the *balancing adjustment event (even if the *termination value equals the *written down value).

Note: If the termination value equals the written down value, the balancing adjustment has