Product Ruling PR 2009/49W
Status: withdrawn








Withdrawal notice: Product Ruling PR 2009/49 is withdrawn with effect from today. 1. This Product Ruling has been withdrawn in accordance with subsection 358-20(1) of Schedule 1 to the Taxation Administration Act 1953, which states the Commissioner may withdraw a public ruling either wholly or to an extent. 2. Product Ruling PR 2009/49 set out the Commissioner's opinion on the tax consequences for persons participating (the Growers) in the Macquarie Almond Investment 2009- Late Growers ('the Project'), a managed investment scheme, entered into for the purpose of establishing and harvesting Almond trees in Australia. 3. Macquarie Alternative Assets Management Ltd (MAAML) (the Responsible Entity) advised that in agreement with the Growers the almond orchards were sold on 17 August 2015 and the Project will be wound up. 4. The past deductions claimed by Growers, as set out in PR 2009/49, will not be denied provided that the Scheme was carried out in the manner described in the ruling up until the date the lease was surrendered. 5. The revenue from the sales of the Almonds from the 2015 Crop will be treated as assessable income by the Growers in a manner consistent with the existing Ruling, in the 2016 income year. 6. The surrender of the Project lease by MAAML, acting in its capacity as trustee for the Growers, will give rise to a capital gain on the effective date of the lease termination deeds, equal to the entire cash offer amount received by MAAML. The capital gain will be a discount capital gain. 7. Each Grower's share of the capital gain, made by MAAML on trust for the Growers from the lease surrender, is assessable income in the income year in which the CGT event occurs. MAAML will provide each Grower with a statement detailing the calculation of their share of the capital gain and the discount applied, to assist them in meeting their own capital gains tax obligations. 8. As MAAML's capital gain will be a discount capital gain, each Grower will be required to: 9. The appropriate percentage for a Grower who is an individual will be a 50% CGT discount, and for a Grower who is a complying superannuation entity it will be a 33 ⅓ % CGT discount (under subdivision 115-B of the ITAA 1997). 10. Paragraphs 91 to 94 of PR 2009/49 set out how the Growers' participation in the Project constitutes the carrying on of a business of primary production by the Growers. Upon the sale of the almond orchards, on 17 August 2015, all Growers ceased to carry on a business of primary production in this project. 11. Following the surrender of the Leases, if a Grower has an outstanding loan and the interest incurred on the loans was previously deductible, interest expenditure will continue to be deductible (under section 8-1 of the ITAA 1997) even though they have ceased to carry on a business, provided Growers meet certain requirements. 12. These requirements are outlined in Taxation Ruling TR 2004/4. 13. Generally, where a business activity has ceased, ongoing interest will continue to be deductible unless an event or circumstance occurs to break the connection between the loan and the business activity. If you refinance, renegotiate or otherwise alter the purpose of the loan, the connection to the income earning activity may be broken and the interest may no longer be deductible. Commissioner of Taxation 16 September 2015 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Related rulings: PR 2009/9 TR 97/7 TR 97/11 TR 98/22
Legislative references: ITAA 1936 82KL ITAA 1936 Pt III Div 3 Subdiv H ITAA 1936 82KZL ITAA 1936 82KZLA ITAA 1936 82KZM ITAA 1936 82KZMA ITAA 1936 82KZMB ITAA 1936 82KZMC ITAA 1936 82KZMD ITAA 1936 82KZME ITAA 1936 82KZMF ITAA 1936 Pt IVA ITAA 1936 177A ITAA 1936 177C ITAA 1936 177D ITAA 1936 177D(b) ITAA 1936 318 ITAA 1997 6-5 ITAA 1997 8-1 ITAA 1997 17-5 ITAA 1997 25-25 ITAA 1997 25-25(1) ITAA 1997 Div 27 ITAA 1997 Div 35 ITAA 1997 35-10 ITAA 1997 35-10(2) ITAA 1997 35-55 ITAA 1997 35-55(1)(b) ITAA 1997 40-515(1)(b) ITAA 1997 40-520(2) ITAA 1997 40-525(2) ITAA 1997 40-530 ITAA 1997 40-545 TAA 1953 Copyright Act 1968 Corporations Act 2001 SISA 1993
Case references: Hance v. FC of T; Hannebery v. FC of T [2008] FCAFC 196 2008 ATC 20-085
Subject references: carrying on a business non-commercial losses producing assessable income product rulings public rulings tax benefits under tax avoidance schemes tax shelters tax shelters project taxation administration