Document ID: chunk:federal_register_of_legislation:C2014C00703:clause:1_2:p6
Version: federal_register_of_legislation:C2014C00703
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 6/6)
Character Range: 29241–31413

notionally deduct the decline in value of a tangible depreciating asset used for R&D activities.
      If a balancing adjustment event later happens for the asset, the R&D entity may be able to notionally deduct a further amount. Alternatively, an amount may be included in the R&D entity's assessable income.

355‑305  When notional deductions for decline in value arise
 (1) If:
 (a) an *R&D entity is registered under section 27A of the Industry Research and Development Act 1986 for an income year (the present year) for one or more *R&D activities that are activities to which section 355‑210 (conditions for R&D activities) applies; and
 (b) while a tangible *depreciating asset is *held by the R&D entity during the present year, the asset is used for the purpose of conducting one or more of those R&D activities; and
 (c) the R&D entity could deduct an amount under section 40‑25 for the asset for the present year if Division 40 applied with the changes described in section 355‑310; and
 (d) the R&D entity cannot deduct an amount for the asset for:
 (i) an earlier income year under Subdivision 328‑D (capital allowances for small business entities); or
 (ii) an earlier income year under Division 40 (as that Division applies apart from this Division), in a case where section 40‑440 (low‑value pools) applied;
the R&D entity can deduct the amount referred to in paragraph (c) for the present year.
 (2) This section has effect subject to subsection 355‑580(4) (CRC contributions).

355‑310  Notional application of Division 40
 (1) In addition to its application apart from this section, Division 40 also applies with the changes set out in this section for the purposes of:
 (a) paragraph 355‑225(1)(b) (excluded expenditure); and
 (b) paragraph 355‑305(1)(c); and
 (c) section 355‑315 (balancing adjustments).
 (2) Firstly, substitute the following for references to a *taxable purpose in Subdivisions 40‑A to 40‑D (other than for the purposes of sections 40‑100, 40‑105 and 40‑110):

Replacing references to a taxable purpose
Item                                       If this application of Division 40 is for the purposes of:  Substitute a reference to: