Commentary

B3.603 Patent rights writing down allowances

Business tax
Business tax | Commentary

B3.603 Patent rights writing down allowances

Business tax | Commentary

B3.603 Patent rights writing down allowances

The calculation of allowances for expenditure incurred after 31 March 1986 is similar to that for plant and machinery (see Division B3.3). Qualifying expenditure (see B3.602) is pooled for the purpose of determining entitlement to writing-down allowances and balancing allowances and liability to balancing charges1.

The provisions for expenditure incurred before 1 April 1986 are no longer relevant as expenditure was written off on a straight-line basis of over 17 years.

There is a separate pool:

  1.  

    (a)     for each trade in respect of which the person has qualifying trade expenditure (see B3.602); and

  2.  

    (b)     for all of the person's qualifying non-trade expenditure (see B3.602)2.

A person is entitled to a writing-down allowance for a chargeable period (except the final chargeable period) if AQE exceeds TDR for that period, where:

  1.  

    (i)     AQE is the available qualifying expenditure in the pool for that period; and

  2.  

    (ii)     TDR is the total

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