Product Ruling PR 2008/51
Date of effect: 28 May 2008

What this ruling is about: 1. This Product Ruling sets out the Commissioner's opinion on the way in which the relevant provision(s) identified in the Ruling section (below) apply to the defined class of entities, who take part in the scheme to which this Ruling relates. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997) unless otherwise indicated. In this Product Ruling this scheme is referred to as the Goulburn Valley Orchards Project or simply as 'the Project'. Class of entities 2. This part of the Product Ruling specifies which entities can rely on the tax benefits set out in the Ruling section of this Product Ruling and which entities cannot rely on those tax benefits. 3. The class of entities who can rely on those tax benefits are referred to as Growers. Growers will be those entities who were specifically identified in the Ruling part of Product Ruling PR 1999/7 and who, on or after 3 March 1999 and on or before 30 June 1999, entered into the specified scheme that is set out in paragraphs 12 to 26 of that Ruling. They must have a purpose of staying in the scheme until it is completed (that is being a party to the relevant agreements until their term expires), and deriving assessable income from this involvement. 4. The class of entities who can rely on the tax benefits set out in the Ruling section of this Product Ruling does not include entities who: Qualifications 5. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 26 of PR 1999/7. 6. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then: 7. This work is copyright. Apart from any use as permitted under the Copyright Act 1968 , no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to:

Class of entities or scheme: 2. This part of the Product Ruling specifies which entities can rely on the tax benefits set out in the Ruling section of this Product Ruling and which entities cannot rely on those tax benefits. 3. The class of entities who can rely on those tax benefits are referred to as Growers. Growers will be those entities who were specifically identified in the Ruling part of Product Ruling PR 1999/7 and who, on or after 3 March 1999 and on or before 30 June 1999, entered into the specified scheme that is set out in paragraphs 12 to 26 of that Ruling. They must have a purpose of staying in the scheme until it is completed (that is being a party to the relevant agreements until their term expires), and deriving assessable income from this involvement. 4. The class of entities who can rely on the tax benefits set out in the Ruling section of this Product Ruling does not include entities who: | Qualifications: 5. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 26 of PR 1999/7. 6. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then: 7. This work is copyright. Apart from any use as permitted under the Copyright Act 1968 , no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to: 8. This Product Ruling applies prospectively from 28 May 2008, the date this Product Ruling is made. It therefore applies only to the specified class of entities that entered into the scheme set out in paragraphs 12 to 26 of PR 1999/7 between 3 March 1999 and 30 June 1999. This Product Ruling provides advice on the availability of tax benefits to the specified class of entities for the 2006-07 income year. 9. However the Product Ruling only applies to the extent that: 10. If this Product Ruling is inconsistent with a later public or private ruling, the relevant class of entities may rely on either ruling which applies to them (item 1 of subsection 357-75(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA)). 11. If this Product Ruling is inconsistent with an earlier private ruling, the private ruling is taken not to have been made if, when the Product Ruling is made, the following two conditions are met: 12. If the above two conditions do not apply, the relevant class of entities may rely on either ruling which applies to them (item 3 of subsection 357-75(1) of Schedule 1 to the TAA). | Continuing application of PR 1999/7: 13. Although now withdrawn, the tax benefits set out in PR 1999/7 continue to apply to participants who are within the specified class of entities to which the Product Ruling applied and who entered into the specified scheme between 3 March 1999 and 30 June 1999. This is subject to there being no material difference in the scheme or in the entities' involved in the scheme. | Section 35-55 - exercise of Commissioner's discretion: 14. A Grower who is an individual accepted into the Project between 3 March 1999 and 30 June 1999 may have losses arising from their participation in the Project that would be deferred to a later income year under section 35-10. Subject to the Project being carried out in the manner described in paragraphs 12 to 26 of PR 1999/7, the Commissioner will exercise the discretion in paragraph 35-55(1)(a) for Growers for the income year ended 30 June 2007. This conditional exercise of the discretion will allow those losses to be offset against the Grower's other assessable income in the income year in which the losses arise. 15. The scheme that is the subject of this Ruling is specified in paragraphs 12 to 26 of PR 1999/7. Commissioner of Taxation 28 May 2008 | Section 35-55 - exercise of the Commissioner's discretion: 16. In deciding to exercise the discretion in paragraph 35-55(1)(a) on a conditional basis for the 2006-07 income year, the Commissioner has applied the principles set out in Taxation Ruling TR 2007/6 Income tax: non-commercial business losses: Commissioner's discretion. Based on the evidence supplied by the Responsible Entity GV Management Limited, the Commissioner has determined that for the 2006-07 income year it is unreasonable to apply the rule in section 35-10 as the Grower's activity was affected by special circumstances outside the control of the Manager. 17. The exercise of the Commissioner's discretion under paragraph 35-55(1)(a) is conditional on the Project being carried on in the manner described in this Ruling during the income years specified. If the Project is carried out in a materially different way to that described in the Ruling a Grower will need to apply for a private ruling on the application of section 35-55 to those changed circumstances. 18. The following is a detailed contents list for this Ruling: Not previously issued as a draft

Ruling: This Product Ruling has been given on the basis that the entity(s) who applied for the Product Ruling, and their associates, will abide by strict terms of use. Any failure to comply with the terms of use may lead to the withdrawal of this Product Ruling. 1. This Product Ruling sets out the Commissioner's opinion on the way in which the relevant provision(s) identified in the Ruling section (below) apply to the defined class of entities, who take part in the scheme to which this Ruling relates. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 (ITAA 1997) unless otherwise indicated. In this Product Ruling this scheme is referred to as the Goulburn Valley Orchards Project or simply as 'the Project'. | Class of entities: 2. This part of the Product Ruling specifies which entities can rely on the tax benefits set out in the Ruling section of this Product Ruling and which entities cannot rely on those tax benefits. 3. The class of entities who can rely on those tax benefits are referred to as Growers. Growers will be those entities who were specifically identified in the Ruling part of Product Ruling PR 1999/7 and who, on or after 3 March 1999 and on or before 30 June 1999, entered into the specified scheme that is set out in paragraphs 12 to 26 of that Ruling. They must have a purpose of staying in the scheme until it is completed (that is being a party to the relevant agreements until their term expires), and deriving assessable income from this involvement. 4. The class of entities who can rely on the tax benefits set out in the Ruling section of this Product Ruling does not include entities who: | Qualifications: 5. The class of entities defined in this Product Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 26 of PR 1999/7. 6. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then: 7. This work is copyright. Apart from any use as permitted under the Copyright Act 1968 , no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to:


Appendix: Section 35-55 - exercise of the Commissioner's discretion: 16. In deciding to exercise the discretion in paragraph 35-55(1)(a) on a conditional basis for the 2006-07 income year, the Commissioner has applied the principles set out in Taxation Ruling TR 2007/6 Income tax: non-commercial business losses: Commissioner's discretion. Based on the evidence supplied by the Responsible Entity GV Management Limited, the Commissioner has determined that for the 2006-07 income year it is unreasonable to apply the rule in section 35-10 as the Grower's activity was affected by special circumstances outside the control of the Manager. 17. The exercise of the Commissioner's discretion under paragraph 35-55(1)(a) is conditional on the Project being carried on in the manner described in this Ruling during the income years specified. If the Project is carried out in a materially different way to that described in the Ruling a Grower will need to apply for a private ruling on the application of section 35-55 to those changed circumstances.


What this Ruling is about | NOT LEGALLY BINDING SECTION: | A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, we must apply the law to you in the way set out in the ruling (or in a way that is more favourable for you if we are satisfied that the ruling is incorrect and disadvantages you, and we are not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | No guarantee of commercial success: The Tax Office does not sanction or guarantee this product. Further, we give no assurance that the product is commercially viable, that charges are reasonable, appropriate or represent industry norms, or that projected returns will be achieved or are reasonably based. | Potential participants must form their own view about the commercial and financial viability of the product. We recommend a financial (or other) adviser be consulted for such information. | This Product Ruling provides certainty for potential participants by confirming that the tax benefits set out in the Ruling part of this document are available, provided that the scheme is carried out in accordance with the information we have been given, and have described below in the Scheme part of this document. If the scheme is not carried out as described, participants lose the protection of this Product Ruling. | Division 35 - deferral of losses from non-commercial business activities | Appendix 2 - Detailed contents list


Related rulings: TR 2007/6 PR 1999/7 PR 2005/67 PR 2007/5
Legislative references: ITAA 1997 ITAA 1997 Div 35 ITAA 1997 35-10 ITAA 1997 35-55 ITAA 1997 35-55(1)(a) TAA 1953 TAA 1953 Sch 1 357-75(1) Copyright Act 1968
Subject references: Commissioner's discretion non-commercial loss product rulings