Class Ruling CR 2002/23
Date of effect: 1 July 2001


Class of entities or scheme: 3. The class of persons to whom this Ruling applies are all persons ('growers') who, after 1 July 2001, enter into a contract for the sale of wheat by delivery or transfer into the 0:90:10 extended wheat pool ('0:90:10 pool') operated by AusBulk Grain Marketing Division ('AusBulk GMD'), a division of AusBulk Ltd ('AusBulk'). | Qualifications: 4. The Commissioner makes this Ruling based on the precise arrangement identified in this Ruling. 5. The class of persons defined in this Ruling may rely on its contents provided the arrangement described below at paragraph 9 is carried out in accordance with the details of the arrangement provided in this Ruling. 6. If the arrangement described in this Ruling is materially different from the arrangement that is actually carried out: 7. A Class Ruling may only be reproduced in its entirety. Extracts may not be reproduced. Because each Class Ruling is subject to copyright, except for any use permitted under the Copyright Act 1968 no Class Ruling may be reproduced by any process without prior written permission from the Commonwealth. Requests and enquires concerning reproduction and rights should be sent to: 8. This ruling applies to the income year commencing 1 July 2001 and subsequent years in which the arrangement is offered by AusBulk. 9. The arrangement that is the subject of this ruling is the 0:90:10 pool operated by AusBulk GMD and is described in the documents set out below. The relevant documents or parts of documents are: | Sales of wheat into the 0:90:10 pool: 10. For growers returning their income on an accruals basis, distributions made by AusBulk are included in assessable income in the income year in which AusBulk declares each distribution. 11. For growers returning their income on a cash basis, distributions are included in assessable income in the income year in which the grower receives the payments. | Trading stock: 12. The wheat ceases to be trading stock of the grower at the time AusBulk accepts delivery of the wheat. | Application of Part IVA: 13. Having regard to the facts of the arrangement, Part IVA does not apply. 14. When wheat is delivered or transferred into the 0:90:10 pool, a grower accepts the terms and conditions set out in the 'AusBulk 0:90:10 Extended Wheat Pool Product Terms and Conditions'. 15. The AusBulk 0:90:10 Extended Wheat Pool Product Terms and Conditions provide that: 16. The AusBulk 0:90:10 Extended Wheat Pool Product Terms and Conditions also set out the general timing for the declaration and payment of the 0:90:10 pool distributions as it applies for each harvest season. These terms and conditions provide: 17. The specific timing (i.e., exact date) for the declaration and payment of the pool distributions for any particular harvest season will be detailed in the product brochure for the 0:90:10 pool which is published by AusBulk for each harvest season. | Sales of wheat into the 0:90:10 pool: 18. By delivering or transferring wheat into the 0:90:10 pool, AusBulk and the grower enter into a contract of sale. At the time AusBulk accepts delivery of the grower's wheat or approves an in-store transfer, the grower has sold and AusBulk has purchased the wheat. 19. At the time growers sell their wheat they have a right to receive payment of their share of the pool proceeds, but that right is not presently existing as the payment is neither quantified nor quantifiable. AusBulk quantifies the amount payable to growers by determining and declaring pool distributions. 20. The amount of the distribution is a presently existing recoverable debt for payment of that part of the pool return. The determination and declaration of the amount by AusBulk is the point at which this debt becomes presently existing, unconditional and not subject to any contingency. 21. For growers returning their income on an accruals basis, distributions made by AusBulk are included in assessable income in the income year in which AusBulk declares each distribution. 22. For growers returning income on a cash basis, distributions are included in assessable income in the year in which the grower receives the payments. | Trading stock: 23. As stated at paragraph 18, the grower has sold and AusBulk has purchased the wheat at the time AusBulk accepts delivery of the wheat. 24. When accepted into the 0:90:10 pool by AusBulk, the wheat delivered by the grower is mixed with that of other growers. Accordingly, the grower has lost dispositive power over the wheat as the wheat of that particular grower is no longer identifiable. In the circumstances title in the wheat has passed to AusBulk and the grower has disposed of the wheat ( Farnsworth v. FC of T (1949) 78 CLR 504; (1949) 9 ATD 33). 25. Consequently, the wheat ceases to be trading stock of the grower at that time. | Application of Part IVA: 26. Having regard to the commercial character of the arrangement, Part IVA does not apply. 27. Below is a detailed contents list for this Class Ruling: Commissioner of Taxation 24 April 2002 Not previously released in draft form

Ruling: Sales of wheat into the 0:90:10 pool: 10. For growers returning their income on an accruals basis, distributions made by AusBulk are included in assessable income in the income year in which AusBulk declares each distribution. 11. For growers returning their income on a cash basis, distributions are included in assessable income in the income year in which the grower receives the payments. | Trading stock: 12. The wheat ceases to be trading stock of the grower at the time AusBulk accepts delivery of the wheat. | Application of Part IVA: 13. Having regard to the facts of the arrangement, Part IVA does not apply. 14. When wheat is delivered or transferred into the 0:90:10 pool, a grower accepts the terms and conditions set out in the 'AusBulk 0:90:10 Extended Wheat Pool Product Terms and Conditions'. 15. The AusBulk 0:90:10 Extended Wheat Pool Product Terms and Conditions provide that: 16. The AusBulk 0:90:10 Extended Wheat Pool Product Terms and Conditions also set out the general timing for the declaration and payment of the 0:90:10 pool distributions as it applies for each harvest season. These terms and conditions provide: 17. The specific timing (i.e., exact date) for the declaration and payment of the pool distributions for any particular harvest season will be detailed in the product brochure for the 0:90:10 pool which is published by AusBulk for each harvest season. | Sales of wheat into the 0:90:10 pool: 18. By delivering or transferring wheat into the 0:90:10 pool, AusBulk and the grower enter into a contract of sale. At the time AusBulk accepts delivery of the grower's wheat or approves an in-store transfer, the grower has sold and AusBulk has purchased the wheat. 19. At the time growers sell their wheat they have a right to receive payment of their share of the pool proceeds, but that right is not presently existing as the payment is neither quantified nor quantifiable. AusBulk quantifies the amount payable to growers by determining and declaring pool distributions. 20. The amount of the distribution is a presently existing recoverable debt for payment of that part of the pool return. The determination and declaration of the amount by AusBulk is the point at which this debt becomes presently existing, unconditional and not subject to any contingency. 21. For growers returning their income on an accruals basis, distributions made by AusBulk are included in assessable income in the income year in which AusBulk declares each distribution. 22. For growers returning income on a cash basis, distributions are included in assessable income in the year in which the grower receives the payments. | Trading stock: 23. As stated at paragraph 18, the grower has sold and AusBulk has purchased the wheat at the time AusBulk accepts delivery of the wheat. 24. When accepted into the 0:90:10 pool by AusBulk, the wheat delivered by the grower is mixed with that of other growers. Accordingly, the grower has lost dispositive power over the wheat as the wheat of that particular grower is no longer identifiable. In the circumstances title in the wheat has passed to AusBulk and the grower has disposed of the wheat ( Farnsworth v. FC of T (1949) 78 CLR 504; (1949) 9 ATD 33). 25. Consequently, the wheat ceases to be trading stock of the grower at that time. | Application of Part IVA: 26. Having regard to the commercial character of the arrangement, Part IVA does not apply. 27. Below is a detailed contents list for this Class Ruling: Commissioner of Taxation 24 April 2002 Not previously released in draft form




What this Class Ruling is about | Preamble: The number, subject heading, and the What this Class Ruling is about (including Tax law(s), Class of persons and Qualifications sections), Date of effect, Arrangement and Ruling parts of this document are a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953. CR 2001/1 explains Class Rulings and Taxation Rulings TR 92/1 and TR 97/16 together explain when a Ruling is a public ruling and how it is binding on the Commissioner. | What this Class Ruling is about: 1. This Ruling sets out the Commissioner's opinion on the way in which the 'tax laws' identified below apply to the defined class of persons who take part in the arrangement to which this Ruling relates. | Tax law(s): 2. The tax laws dealt with in this Ruling are:


Related rulings: CR 2001/1 TR 92/1 TR 97/16
Legislative references: TAA 1953 Pt IVAAA ITAA 1997 6-5 ITAA 1997 Div 70 ITAA 1936 Pt IVA Copyright Act 1968
Case references: Farnsworth v. FC of T (1949) 78 CLR 504 (1949) 9 ATD 33
Subject references: wheat growing crops as trading stock derivation of income primary production income