Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_10:p3
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 10 (pt 3/4)
Character Range: 637810–640753

the licence is later surrendered to you;

your *unrecouped expenditure on the item is increased, at the time of the surrender, by the amount of any capital expenditure you incurred in obtaining the surrender.

 (2) However, the increase is less if you and the licensee were not dealing with each other at *arm's length, and the consideration for the surrender is greater than:

 (a) the licence's market value when it is surrendered to you; or

 (b) the capital expenditure the licensee incurred in obtaining the licence.

In that case, your *unrecouped expenditure on the item is only increased by the lesser of those amounts.

 (3) If the surrender happens after the end of the item's *effective life, section 373‑20 applies to the income year of the surrender as if the number of income years referred to in that section were one.

Note: This means that if you can deduct an amount for the item under Subdivision 373‑B for the income year of the surrender, that amount is the whole of any capital expenditure you incurred in obtaining the surrender.

Adjusting your expenditure on the item

373‑100  If the item is acquired in a non‑arm's length transaction

 (1) Your *expenditure on an item of *intellectual property may be adjusted as set out in this section if:

 (a) that expenditure would otherwise be worked out using Case 2, 3 or 4 in the table in subsection 373‑30(2); and

 (b) you and the entity from which you *acquired the item did not deal with each other at *arm's length.

Note: If that entity had owned the item since before the 1998‑99 income year: see section 373‑100 of the Income Tax (Transitional Provisions) Act 1997.

 (2) Compare your *expenditure on the item as worked out using that Case with:

 (a) that entity's *expenditure on the item; and

 (b) the item's market value when you acquired it.

 (3) If your *expenditure on the item as worked out using that Case is greater than one or other of those amounts, your *expenditure on the item is instead taken to be the lesser of them.

Special rules if you bought only part of another item

 (4) However, if you bought the item from that entity (Case 3 or 4 in the table in subsection 373‑30(2)) and an item in the table below applies, instead compare your *expenditure on the item as worked out using that Case with each amount described in the last column of that item.

Your expenditure if you bought only part of another item
Item                                                      If:                                                                                                                                                                    The comparison amounts are:
  1                                                       the item was only a percentage interest of another item of *intellectual property owned by the entity                                                                  (a) the item's market value when