Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION

PART 2-1 - ASSESSABLE INCOME

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Division 20 - Amounts included to reverse the effect of past deductions

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Guide to Division 20

SECTION 20-5

20-5 Other provisions that reverse the effect of deductions

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The table lists other provisions that reverse the effect of certain kinds of deductions.

Provisions of the Income Tax Assessment Act 1997 are identified in normal text. The other provisions, in bold , are provisions of the Income Tax Assessment Act 1936 .

Provisions that adjust your tax position in respect of deductions
Item	In this situation:	See:
1	A balancing adjustment for a depreciating asset is included in your assessable income.	40-285(1) and 40-445(2)
.
2	An amount you receive by way of insurance or indemnity for a loss of trading stock is included in your assessable income.	70-115
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2A	Limited recourse debt that was used to finance expenditure deductible under a capital allowance (or on property for which you have deducted or can deduct amounts under a capital allowance) terminates: an amount is included in your assessable income.	243-40
.
3	Because of:	40-750(3)
		• petroleum resource rent tax; or
		• an instalment of petroleum resource rent tax;
	that you have deducted or can deduct, an amount is refunded, credited, paid or applied: the amount is included in your assessable income.
.
3A	(Repealed by No 77 of 2001)
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4	You receive a fringe benefit by way of reimbursement or payment of a loss or outgoing you incurred: your deduction for the loss or outgoing is reduced.	51AH
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5	(Repealed by No 93 of 2011)
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6	(Repealed by No 93 of 2011)
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7	You receive an amount as recoupment for your local governing body election expenses: an amount is included in your assessable income.	74A(4)
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8	You receive superannuation benefits as a result of someone ' s deductible contributions: the benefits are included in your assessable income.	290-100
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9	An R & D entity receives or becomes entitled to receive an amount:	355-410
		• for, or relating to, the results of R & D activities; or
		• attributable to it incurring expenditure on R & D activities or to its use of a depreciating asset for the purpose of conducting R & D activities;
	and the entity is entitled under Division 355 to a tax offset relating to those R & D activities. The amount is included in its assessable income.
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10	An R & D entity:	Subdivision 355-G
	•	receives, or becomes entitled to receive, a recoupment from government relating to R & D activities; or
	•	can deduct, under Division 355 , expenditure on goods, materials or energy used during R & D activities to produce marketable products or products applied to the R & D entity ' s own use;
	and the entity is entitled under Division 355 to a tax offset relating to those R & D activities. An amount is included in its assessable income.

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History

S 20-5 amended by No 92 of 2020, s 3 and Sch 5 item 14, by substituting table item 10, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. Table item 10 formerly read:

10 You receive a recoupment from government relating to R & D activities for which entitlements to tax offsets under Division 355 arise. Subdivision 355-G

Extra income tax is payable on the recoupment.

S 20-5 amended by No 93 of 2011, s 3 and Sch 3 items 67 and 68, by repealing table items 5 and 6, and inserting table items 9 and 10, effective 8 September 2011. For application, savings and transitional provisions see note under Div 355 heading. Table items 5 and 6 formerly read:

" 5 A company receives (or becomes entitled to) an amount: 73B(27A), 73BF(4), 73BM(4)

• in respect of the results of research and
development activities on which it incurred
deductible expenditure; or

• attributable to it having incurred
deductible expenditure on research and
development activities.

The amount is included in its assessable income.

.

6 You receive an amount as recoupment of expenditure on research and development activities that you have deducted at the rate of 150%: the rate of deduction is reduced to 100%. 73C "

S 20-5 table amended by No 15 of 2007, s 3 and Sch 1 item 177 and No 143 of 2007 , s 3 and Sch 5 item 42, by substituting " 290-100 " for " 82AAQ " in table item 8, applicable to the 2007-2008 income year and later years.

S 20-5 amended by No 170 of 2001, No 77 of 2001, No 72 of 2001, No 46 of 1998 and inserted by No 121 of 1997.

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10	You receive a recoupment from government relating to R & D activities for which entitlements to tax offsets under Division 355 arise.	Subdivision 355-G
	Extra income tax is payable on the recoupment.

" 5	A company receives (or becomes entitled to) an amount:	73B(27A), 73BF(4), 73BM(4)
		• in respect of the results of research and development activities on which it incurred deductible expenditure; or
		• attributable to it having incurred deductible expenditure on research and development activities.
	The amount is included in its assessable income.
.
6	You receive an amount as recoupment of expenditure on research and development activities that you have deducted at the rate of 150%: the rate of deduction is reduced to 100%.	73C "