Income Tax Assessment Act 1936
View history note
Hide history noteDiv 3 heading inserted by No 172 of 1978.
(Repealed by No 93 of 2011)
S 73BF repealed by No 93 of 2011, s 3 and Sch 3 item 44, effective 8 September 2011. For application, savings and transitional provisions see note under s
82KZLB
. S 73BF formerly read:
then the deduction mentioned in paragraph (d) is allowable to the eligible company, or the amount mentioned in paragraph (d) is included in the eligible company
'
s assessable income, under this section for the year of income in which the balancing adjustment event occurs. If deductions have been allowed etc, under both section
73BA
or
73BH
of this Act and section
40-25
of the
Income Tax Assessment Act 1997
for a section
73BA
depreciating asset, the balancing adjustment provisions of Division
40
of that Act apply in a modified way: see section
40-292
of that Act. An asset whose tax cost is set under Division
701
of the
Income Tax Assessment Act 1997
may have its adjustable value reduced in applying this section: see section
73BAG
of this Act.
SECTION 73BF BALANCING ADJUSTMENTS: SECTION 73BA DEPRECIATING ASSETS
73BF(1)
If:
(a)
a balancing adjustment event (within the meaning of section
40-295
of the
Income Tax Assessment Act 1997
) happens in relation to a section
73BA
depreciating asset of an eligible company; and
(b)
one or more deductions have been allowed or are allowable to the eligible company under section
73BA
or
73BH
for the asset for a year or years of income, or would have been so allowed or allowable if:
(i)
the company had not chosen a tax offset under section
73I
; or
(ii)
section
73BAF
had not been enacted; and
(c)
no deduction:
(i)
is allowable to the eligible company under section
40-25
of the
Income Tax Assessment Act 1997
for the asset for any year of income; or
(ii)
was allowable to the eligible company under section
42-15
of the
Income Tax Assessment Act 1997
, as in force before its repeal by the
New Business Tax System (Capital Allowances) Act 2001
, for the asset for any year of income; and
(d)
a deduction would be allowable to the eligible company, or an amount would be included in the eligible company
'
s assessable income, in respect of the balancing adjustment event under Subdivision
40-D
of that Act if:
(i)
the changes set out in section
73BC
were made; and
(ii)
section
40-292
of the
Income Tax Assessment Act 1997
and this section (other than this paragraph) had not been enacted;
Note 1:
Note 2:
S 73BF(1) amended by No 16 of 2003.
73BF(2) Increase in deduction or assessable amount where section 73BA deductions allowable at 1.25 rate.
However, if at least one of the deductions mentioned in paragraph (1)(b) was worked out by multiplying a notional Division 40 deduction or a notional Division 42 deduction by 1.25 (or would have been so worked out had section 73BAF not been enacted), subsection (3) applies.
S 73BF(2) amended by No 16 of 2003.
73BF(3)
Any amount (the subsection (1) amount ) allowable as a deduction to, or included in the assessable income of, the eligible company under subsection (1) of this section for the section 73BA depreciating asset is increased by the amount worked out using the formula:
| Sum of all 1.25 rate notional
Division 40/42 deductions Total decline in value |
× Adjusted subsection (1) amount × 0.25 |
where:
adjusted subsection (1) amount
means:
(a) if the subsection (1) amount is a deduction - the amount of the deduction; or
(b) if the subsection (1) amount is an amount included in the eligible company ' s assessable income - so much of the subsection (1) amount as does not exceed the formula component total decline in value .
sum of all 1.25 rate notional Division 40/42 deductions
means the sum of all notional Division 40 deductions or notional Division 42 deductions that were multiplied by 1.25 in working out the deductions mentioned in paragraph (1)(b) for the section
73BA
depreciating asset.
total decline in value
means the cost of the section
73BA
depreciating asset, less its adjustable value, just before the balancing adjustment event, where that cost and adjustable value are the amounts taken into account in applying Subdivision
40-D
of the
Income Tax Assessment Act 1997
in accordance with paragraph (1)(d) for the purpose of working out the subsection (1) amount.
73BF(3A)
Subsection (3B) has effect if:
(a) the head company of a consolidated group or MEC group can deduct an amount under subsection (1) for a section 73BA depreciating asset for a year of income; and
(b) the head company ' s aggregate research and development amount for the year of income exceeds $20,000; and
(c) the asset was used exclusively for research and development activities since its tax cost was set under Division 701 of the Income Tax Assessment Act 1997 .
S 73BF(3A) inserted by No 16 of 2003.
73BF(3B)
The numerator in the formula in subsection (3) is increased by any expenditure on the asset that the head company can deduct under section 73B after the asset ' s tax cost was set.
S 73BF(3B) inserted by No 16 of 2003.
73BF(4) Assessability of amounts received in respect of results etc. of research and development activities.
Subject to subsections (5) and (6), if:
(a) an eligible company has incurred any expenditure in respect of which:
(i) a deduction under section 73BA or 73BH has been allowed or is allowable to the company, or would have been so allowed or allowable if the company had not chosen a tax offset under section 73I ; or
(ii) in the case of a company whose income was exempt from tax when the expenditure was incurred - a deduction under section 73BA or 73BH would have been allowable if the company ' s income had not been so exempt from tax; and
(b) the eligible company receives or is entitled to receive:
(i) an amount in respect of the results of any of the research and development activities in relation to which the expenditure was incurred; or
(ii) an amount attributable to the company having incurred the expenditure, including an amount that it is entitled to receive irrespective of the results of the activities;
that amount is included in the company ' s assessable income of the year of income in which the company received or became entitled to receive it.
73BF(5)
The reference in subsection (4) to a company receiving or being entitled to receive an amount in respect of the results of any research and development activities includes a reference to:
(a) the company receiving or being entitled to receive an amount from the grant of access to, or the grant of a right to use, any of those results; and
(b) the company receiving or being entitled to receive an amount from the disposal of, or of an interest in, any section 73BA depreciating asset or from the grant of a right to use any section 73BA depreciating asset where, as a result of the disposal or grant, another person has acquired a right of access to, or a right to use, any of those results;
but does not include a reference to the company receiving or being entitled to receive an amount in consequence of the use by the company of any of those results.
73BF(6)
If a company receives or is entitled to receive an amount as mentioned in paragraph (5)(b), the amount to be included in the company ' s assessable income under subsection (4) is only so much (if any) of the amount mentioned in that paragraph as exceeds the cost to the company of acquiring or constructing the section 73BA depreciating asset concerned.
73BF(7) Definitions.
In this section:
aggregate research and development amount
has the same meaning as in section
73B
.
Definition of " aggregate research and development amount " inserted by No 16 of 2003.
eligible company
has the same meaning as in section
73B
.
notional Division 40 deduction
has the meaning given by section
73BC
.
notional Division 42 deduction
has the meaning given by section
73BJ
.
research and development activities
has the same meaning as in section
73B
.
section 73BA depreciating asset
has the meaning given by section
73BB
.
S 73BF inserted by No 170 of 2001.
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