Tax Law Improvement Act (No. 1) 1998 (46 of 1998)
4 Intellectual property (new Division 373)
1 Amendment of the Income Tax (Transitional Provisions) Act 1997
1 Section 330-75 (link note)
Repeal the link note, substitute:
[The next Division is Division 373.]
Division 373 - Intellectual property
Table of sections
373-1 Application of Division 373 of the Income Tax Assessment Act 1997
373-10 Application to item of intellectual property you owned before 1998-99
373-65 Effect on balancing adjustment if there has been roll-over relief under the old law only
373-100 Item you acquired in a non-arm's length transaction
373-1 Application of Division 373 of the Income Tax Assessment Act 1997
Division 373 (Intellectual property) of the Income Tax Assessment Act 1997 applies to assessments for the 1998-99 income year and later income years.
[The next section is section 373-10.]
373-10 Application to item of intellectual property you owned before 1998-99
(1) This section affects how Division 373 (Intellectual property) of the Income Tax Assessment Act 1997 applies if you have owned an item of intellectual property since before the 1998-99 income year.
Unrecouped expenditure
(2) Your unrecouped expenditure on the item at the start of the 1998-99 income year equals the item's residual value in relation to you immediately after the end of the 1997-98 income year, as worked out under Division 10B of Part III of the Income Tax Assessment Act 1936. (It can later be reduced and increased as provided in Division 373 (Intellectual property) of the Income Tax Assessment Act 1997.)
See section 373-25 of the Income Tax Assessment Act 1997.
Effective life
(3) The item's effective life in your hands is the same as its effective life worked out at the end of the 1997-98 income year under Division 10B of Part III of the Income Tax Assessment Act 1936. (This is despite section 373-35 of the Income Tax Assessment Act 1997.)
Taking account of what happened before 1998-99
(4) The provisions of the Income Tax Assessment Act 1997 listed in column 2 of an item in the table apply as shown in the table.
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Taking account of what happened before 1998-99 |
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The following provision(s): |
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in the same way as they apply to this: |
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1 |
373-50(4); 373-65(2); 41-40(2) (as applying because of 373-80 and 373-85) |
an amount you have deducted or can deduct for the item under Division 10B of Part III of the Income Tax Assessment Act 1936 for an income year before the 1998-99 income year |
an amount you have deducted or can deduct for the item under Subdivision 373-B or 373-D (as appropriate) of the Income Tax Assessment Act 1997 |
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2 |
373-50(4); 373-65(2); 373-85(4); 41-40(2) (as applying because of 373-80 and 373-85) |
an amount that section 124P of the Income Tax Assessment Act 1936 included in your assessable income for the item for an income year before the 1998-99 income year |
an amount included in your assessable income for the item by section 373-50 or 373-65 (as appropriate) of the Income Tax Assessment Act 1997 |
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3 |
373-60(1)(a) |
the item's cost to you for the purposes of Division 10B of Part III of the Income Tax Assessment Act 1936 |
your expenditure on the item |
[The next section is section 373-65.]
373-65 Effect on balancing adjustment if there has been roll-over relief under the old law only
(1) If:
(a) in the 1997-98 income year or an earlier income year roll-over relief was available under section 124PA of the Income Tax Assessment Act 1936 in relation to the disposal of an item of intellectual property by a taxpayer (the transferor) to another taxpayer (the transferee); and
(b) a balancing adjustment is required for the item for the 1998-99 income year or a later income year; and
(c) there has been no earlier balancing adjustment event for the item for which roll-over relief was available under Common rule 1;
the balancing adjustment is affected in 2 ways.
(2) First:
(a) the total amounts that the transferor deducted or could deduct for the item under Division 10B of Part III of the Income Tax Assessment Act 1936; or
(b) if there have been 2 or more prior applications of section 124PA of that Act to the item - the total amounts that the prior transferors deducted or could deduct for the item under that Division;
are taken to have been amounts that the transferee deducted or could deduct for the item under that Division.
(3) Second:
(a) the total amounts included in the transferor's assessable income under Division 10B of Part III of the Income Tax Assessment Act 1936 because of the item; or
(b) if there have been 2 or more prior applications of section 124PA of that Act to the item - the total amounts included under that Division in the assessable income of the prior transferors because of the item;
are taken to have been amounts included in the transferee's assessable income under that Division because of the item.
[The next section is section 373-100.]
373-100 Item you acquired in a non-arm's length transaction
(1) This section affects how section 373-100 of the Income Tax Assessment Act 1997 applies to you if the entity from which you acquired the item had owned since before the 1998-99 income year:
(a) the item itself; or
(b) if subsection 373-100(4) of that Act applies - the other item.
(2) That entity's expenditure on the item or other item (as appropriate) is taken to be the cost of the item or other item to the entity for the purposes of Division 10B of Part III of the Income Tax Assessment Act 1936.
[The next Division is Division 375.]