Document ID: chunk:federal_register_of_legislation:C2014C00703:clause:1_4:p1
Version: federal_register_of_legislation:C2014C00703
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 1/7)
Character Range: 58989–61783

4                   *R&D entity                               *R&D partnership

Disregard certain assets held because of CRC contributions
 (3) This section has effect subject to subsection 355‑580(4) (CRC contributions).

355‑525  Balancing adjustments for R&D partnership assets only used for R&D activities
 (1) This section applies to an *R&D entity (the partner) if:
 (a) a *balancing adjustment event happens in an income year (the event year) for an asset *held by an *R&D partnership; and
 (b) the R&D partnership 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 partner is entitled under section 355‑100 to *tax offsets for one or more income years for deductions (the R&D deductions) under section 355‑520 for the asset; and
 (d) the partner 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 (as affected by subsection 355‑520(2)):
 (i) the R&D partnership 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 R&D partnership'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 partner has deductions for the asset under former section 73BA or 73BH of the Income Tax Assessment Act 1936 (see section 355‑325 of the Income Tax (Transitional Provisions) Act 1997).
Note 2: Section 40‑293 applies if the R&D partnership can deduct an amount under section 40‑25, as that section applies apart from this Division and former section 73BC of the Income Tax Assessment Act 1936.

Notional deduction
 (2) If the *R&D partnership could deduct for the event year an amount under subsection 40‑285(2) for the asset and the event if Division 40 applied as described in paragraph (1)(e), the partner can deduct the partner's proportion of that amount for the event year.

Amount to be included in assessable income
 (3) 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) for the asset and the event if Division 40 applied as described in paragraph (1)(e), the partner's proportion of the sum of:
 (a) that amount; and
 (b) the following amount;
is included in the partner's assessable income for the event year:
where:
adjusted section 40‑285 amount means so much of the section 40‑285 amount as does not exceed the total decline in value.