The Income Tax (Tax Incentives for Partnerships) Regulations 2012 have been amended, effective 4 November 2022 or 30 October 2023. These changes impact the qualifying conditions for enhanced writing-down allowances on intellectual property rights under the Enterprise Innovation Scheme.
Key Impacts:
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Qualifying Revenue Test: The primary condition remains a gross revenue threshold of less than $500 million. However, the application now critically depends on partnership control, as defined under Financial Reporting Standard 110 (FRS 110).
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Control-Based Eligibility:
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For partnerships controlled by a single individual partner, or with no single controlling partner, the $500 million test applies to the partnership’s revenue only.
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For partnerships controlled by a single corporate partner, eligibility requires the consolidated gross revenue of the entire group (partnership, controlling company, and all group entities) to be under $500 million. This necessitates a broader group-wide revenue review.
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Definitional Change: The previous standalone definition of “related party” in Regulation 7 has been deleted. The term now defaults to the definition in Section 2 of the Income Tax Act 1947, aligning the terminology with core legislation.
Practical Issues & Actions:
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Accountants must first assess control under FRS 110 for each partnership client to determine the correct revenue consolidation perimeter.
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For corporate-controlled partnerships, obtaining accurate group-wide revenue data is now essential for compliance.
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The retroactive effective dates require a review of prior-year positions for partnerships that previously claimed or considered claiming the incentive. Amendments to past filings may be necessary.
These amendments introduce a control-based, substance-over-form test, tightening the qualifying criteria, especially for partnerships within corporate groups. Firms should immediately review their partnership structures and historical basis periods to ensure compliance and assess ongoing eligibility.
Source: Government Gazette, 28 November 2025