Hello,
I am seeking clarification on the CGT cost base treatment of expenditure relating to R&D where the costs have been capitalised for accounting purposes and an R&D Tax Incentive has been received.
Scenario
- A company incurs R&D expenditure relating to the development of internally generated intellectual property / technology.
- For accounting purposes, the expenditure has been capitalised as a development asset in accordance with accounting standards.
- The company has also claimed the R&D Tax Incentive for the relevant expenditure (- refundable)
- The asset may later be disposed of or give rise to a CGT event.
Question
For CGT cost base purposes, how should the development cost be treated?
Specifically:
- Is the cost base of the asset nil to the extent the expenditure has been claimed under the R&D Tax Incentive?
- Alternatively, does the cost base equal the capitalised accounting cost reduced by the R&D tax incentive received?
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86 views
1 replies