Private ruling: Primary production business
Published: January 2014
Ruling period: Year ending 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Do the activities of a professional shooting wild animals and culling another wild animal meet the definition of "primary production", for the purpose of utilising Farm Management Deposits? | A1: No


Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 995-1

Reasons for decision: Summary: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines what a primary production business is and states that: you carry on a primary production business if you carry on a business of: (a) cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things), in any physical environment; or (b) maintaining animals for the purpose of selling them or their bodily produce (including natural increase); or (c) manufacturing dairy produce from raw material that you produced; or (d) conducting operations relating directly to taking or catching fish, turtles, dugong, bche-de-mer, crustaceans or aquatic molluscs; or (e) conducting operations relating directly to taking or culturing pearls or pearl shell; or (f) planting or tending trees in a plantation or forest that are intended to be felled; or (g) felling trees in a plantation or forest; or (h) transporting trees, or parts of trees, that you felled in a plantation or forest to the place: (i) where they are first to be milled or processed; or (ii) from which they are to be transported to the place where they are first to be milled or processed. The above paragraphs cover all activities which are considered primary production activities. The first two deal generally with cultivating and propagating plants and the second looks at maintaining animals for the purpose of selling them or their bodily produce. The remaining paragraphs look at very specific situations which are not covered by the first two. The entity operates an activity of shooting wild animals and herding and transporting another wild animal to abattoirs. Under the first two general paragraphs the trust doesn't cultivate or propagate plants nor does it maintain animals for the purpose of selling them or their bodily produce. Furthermore the activities are not covered by the remaining paragraphs which cover specific activities. As the activities of the trust are not included in the definition of primary production it is not carrying on a primary production business.

Relevant facts: An entity derives income from shooting wild animals and herding and transporting other wild animals to abattoirs. | Both these activities are done to provide carcasses for meat production.