Does a balancing adjustment event occur under paragraph 40-295(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) for the existing full-scale test model of the taxpayer’s ‘section 73BA depreciating asset’ if the taxpayer discontinues use of the test model because it could not operate in the manner required? Yes. A balancing adjustment event does occur under paragraph 40-295(1)(b) of the ITAA 1997 for the existing test model of the taxpayer’s ‘section 73BA depreciating asset’ because the taxpayer stopped using the asset, […]
Does the taxpayer’s capital expenditure on refining the full-scale test model of their ‘section 73BA depreciating asset’ form part of the asset’s cost for the purpose of working out the taxpayer’s ‘notional Division 40 deduction’ under section 73BC of the Income Tax Assessment Act 1936 (ITAA 1936)? Yes. The taxpayer’s capital expenditure on refining the full-scale test model of their ‘section 73BA depreciating asset’ does form part of the asset’s cost because the expenditure constitutes a second element of cost of the […]
Is the full-scale test model of an item of equipment, which is the subject matter of the taxpayer’s research and development (R&D) activities, a ‘section 73BA depreciating asset’ within the meaning of that term in section 73BB of the Income Tax Assessment Act 1936 (ITAA 1936) for which the taxpayer has a ‘notional Division 40 deduction’ within the meaning of section 73BC of the ITAA 1936? Yes. The full-scale test model is a ‘section 73BA depreciating asset’ because the test […]
Can an eligible company claim a deduction for certain ‘unpaid wages’ under subsection 73B(14) of the Income Tax Assessment Act 1936 (ITAA 1936)? No. The company cannot claim a deduction under subsection 73B(14) of the ITAA 1936 in respect of the ‘unpaid wages’ that have not been incurred by the company. The company is an ‘eligible company’ which undertakes on its own behalf ‘research and development activities’, as defined by subsection 73B(1) of the ITAA 1936. The company’s ‘research and development activities’ […]