Product Ruling PR 2008/20
Date of effect: 5 March 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 Agriwealth 2008 Softwood Project or simply as 'the Project'. Class of entities 2. This part of the Product Ruling specifies which entities: set out in the Ruling section of this Product Ruling. 3. The members of the class of entities who are subject to those taxation obligations and who can rely on those taxation benefits are referred to as Growers. 4. Growers will be those entities that are accepted to participate in the scheme specified below as initial participants [1] on or after the date this Product Ruling is made. They will have executed the relevant Project Agreements set out in paragraph 38 of this Ruling on or before 30 June 2008. In this Ruling, each of these persons will be wholesale clients for the purpose of the Corporations Act 2001 . 5. 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 6. 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 38 to 81 of this Ruling. 7. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then: 8. 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: Superannuation Industry (Supervision) Act 1993 9. This Product Ruling does not address the provisions of the Superannuation Industry (Supervision) Act 1993 (SISA 1993). The Tax Office gives no assurance that the product is an appropriate investment for a superannuation fund. The trustees of superannuation funds are advised that no consideration has been given in this Product ruling as to whether investment in this product may contravene the provisions of SISA 1993.

Class of entities or scheme: 2. This part of the Product Ruling specifies which entities: set out in the Ruling section of this Product Ruling. 3. The members of the class of entities who are subject to those taxation obligations and who can rely on those taxation benefits are referred to as Growers. 4. Growers will be those entities that are accepted to participate in the scheme specified below as initial participants [1] on or after the date this Product Ruling is made. They will have executed the relevant Project Agreements set out in paragraph 38 of this Ruling on or before 30 June 2008. In this Ruling, each of these persons will be wholesale clients for the purpose of the Corporations Act 2001 . 5. 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: 6. 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 38 to 81 of this Ruling. 7. If the scheme actually carried out is materially different from the scheme that is described in this Product Ruling, then: 8. 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: | Superannuation Industry (Supervision) Act 1993: 9. This Product Ruling does not address the provisions of the Superannuation Industry (Supervision) Act 1993 (SISA 1993). The Tax Office gives no assurance that the product is an appropriate investment for a superannuation fund. The trustees of superannuation funds are advised that no consideration has been given in this Product ruling as to whether investment in this product may contravene the provisions of SISA 1993. 10. This Product Ruling applies prospectively from 5 March 2008, the date this Product Ruling is made. It therefore applies only to the specified class of entities that enter into the scheme from 5 March 2008 until 30 June 2008, being the closing date for entry into the scheme. This Product Ruling provides advice on the availability of tax benefits to the specified class of entities for the income years up to 30 June 2010. 11. However the Product Ruling only applies to the extent that: 12. 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)). 13. 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: 14. 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). | Changes in the law: 15. Although this Product Ruling deals with the laws enacted at the time it was issued, later amendments may impact on this Product Ruling. Any such changes will take precedence over the application of this Product Ruling and, to that extent, this Product Ruling will have no effect. 16. Entities who are considering participating in the scheme are advised to confirm with their taxation adviser that changes in the law have not affected this Product Ruling since it was issued. | Note to promoters and advisers: 17. Product Rulings were introduced for the purpose of providing certainty about tax consequences for entities in schemes such as this. In keeping with that intention the Tax Office suggests that promoters and advisers ensure that participants are fully informed of any legislative changes after the Product Ruling is issued. | Goods and Services Tax: 18. All fees and expenditure referred to in this Product Ruling include the Goods and Services Tax (GST) where applicable. In order for an entity (referred to in this Ruling as a Grower) to be entitled to claim input tax credits for the GST included in its expenditure, it must be registered or required to be registered for GST and hold a valid tax invoice. | Application of this Ruling: 19. Subject to the stated qualifications, this part of the Product Ruling sets out in detail the taxation obligations and benefits for a Grower in the defined class of entities who enters into the scheme described at paragraphs 38 to 81 of this Ruling. 20. The Grower's participation in the Project must constitute the carrying on of business of primary production. Provided the Project is carried out as described below, the Grower's business of primary production will commence at the time of execution of their Forestry Management Agreement and Timberlot Agreement, on or before 30 June 2008. Concessions for 'small business entities' [2] 21. From the 2007-08 income year, a range of concessions previously available under the simplified tax system (STS), will be available to an entity if it carries on a business and satisfies the $2 million aggregated turnover test (a 'small business entity'). 22. A 'small business entity' can choose the concessions that best suit its needs. Eligibility for some small business concessions is also dependent on satisfying some additional conditions. Because of these choices and the eligibility conditions the application of the small business concessions to Growers who qualify as a 'small business entity' is not able to be dealt with in this Ruling. | Section 8-1 and Division 27 of the ITAA 1997 and section 82KZMG of the Income Tax Assessment Act 1936: 23. Other than where a 'CGT event' [3] happens to their interest within 4 years of 30 June 2008 (see paragraph 25 of this Ruling), a Grower who is an initial participant in the scheme may claim tax deductions for the following amount on a per Timberlot basis. | Section 82KZMGA: 24. A deduction for the Management Fee for Initial Establishment Services is not allowable where a 'CGT event' happens in relation to a Grower's interest before 1 July 2012 (subsection 82KZMGA(1) of the ITAA 1936). 25. Where deductions for these amounts have already been claimed by a Grower the Commissioner may amend their assessment at any time within two years after the end of the income year in which the 'CGT event' happens. The Commissioner's power to amend in these circumstances applies despite section 170 of the ITAA 1936 (subsection 82KZMGA(2) of the ITAA 1936). 26. Growers whose deductions are disallowed are still required to include in their assessable income the market value of the interest at the time of the 'CGT event' or the decrease in the market value of the interest as a result of the 'CGT event' (see paragraphs 102 to 104 of this Ruling). | Sections 8-1 and 25-25 and Division 27: 27. A Grower who is an initial participant in the scheme may also claim tax deductions for the following fees and expenses on a per Timberlot basis, as set out in the Table: | Sections 6-10, 17-5 and 118-20 of the ITAA 1997 and section 82KZMGB of the ITAA 1936: 28. Where a 'CGT event' (other than a 'CGT event' in respect of a thinning [4] - see paragraph 32 of this Ruling) happens to the interest held by a Grower who is an initial participant in this Project, the market value of the interest, or the decrease in the market value of the interest, is included in the Grower's assessable income (section 6-10 of the ITAA 1997 and section 82KZMGB of the ITAA 1936), less any GST payable on those proceeds (section 17-5 of the ITAA 1997). 29. The amount is included in the Grower's assessable income in the income year in which the 'CGT event' happens (subsection 82KZMGB(2) of the ITAA 1936). 30. 'CGT events' for these purposes include those relating to: 31. Where an amount arising from a 'CGT event' is included in the assessable income of a Grower by section 82KZMGB the anti-overlap provisions in section 118-20 will operate to exclude that amount from the capital gains provisions in Part 3-1. | Sections 6-5 and 17-5: 32. An amount received by a Grower in respect of a thinning of the trees grown in this Project is not an amount received as a result of a 'CGT event' and is not otherwise assessable under section 82KZMGB of the ITAA 1936. The amount is a distribution of ordinary income that arises as an incident of the Grower holding an interest in the Project. Growers include amounts received for thinning the trees in their assessable income in the income year in which the amounts are derived (section 6-5 of the ITAA 1997) less any GST payable on those proceeds (section 17-5 of the ITAA 1997). | Section 35-55 - exercise of Commissioner's discretion: 33. A Grower who is an individual accepted into the Project in the year ended 30 June 2008 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 above, the Commissioner will exercise the discretion in paragraph 35-55(1)(b) for Growers for the income years ended 30 June 2008 to 30 June 2036 . 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. | Sections 82KZME, 82KZMF and 82KL and Part IVA: 34. For a Grower who commences participation in the Project and incurs expenditure as required by Forestry Management Agreement and Timberlot Agreement, the following provisions of the ITAA 1936 have application as indicated: | Part 3-1 of the ITAA 1997 and Division 6 of Part III of the ITAA 1936: 35. Growers may also acquire Units in the Land Trust. The Units are CGT Assets (section 108-5) and the amounts payable for the Units upon subscription constitute an outgoing of capital and are not allowable as a deduction. 36. The amount paid for each Unit will represent the first element of the cost base of the Units (subsection 110-25(2)). The disposal of the Units by the Unit Holder will be a CGT Event and may give rise to a capital gain or loss. 37. Distributions to the Unit Holder by the Trustee of the Land Trust may be income distributions that are included in the assessable income of a Grower who is a Unit Holder in accordance with Division 6 of Part III of the ITAA 1936 or may be non assessable amounts that give rise to CGT Event E4 (section 104-70 of the ITAA 1997). 38. The scheme that is the subject of this Ruling is specified below. This scheme incorporates the following: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 39. The documents highlighted are those that a Grower may enter into. For the purposes of describing the scheme to which this Ruling applies, there are no other agreements, whether formal or informal, and whether or not legally enforceable, which a Grower, or any associate of a Grower, will be a party to, which are a part of the scheme. 40. In accordance with the above documents, a Grower who participates in the scheme must be a wholesale client. This Ruling does not apply unless the Grower is a wholesale client as defined in section 761G of the Corporations Act 2001 . The meaning of wholesale client is explained in the Information Memorandum for this Project. 41. All Australian Securities and Investment Commission (ASIC) requirements are, or will be, complied with for the term of the agreements. 42. The main features of the Agriwealth 2008 Softwood Project are as follows: | The Project: 43. Under the Information Memorandum, applicants are invited to participate in the Agriwealth 2008 Softwood Project - Tree Project and subscribe for Units in the Agriwealth 2008 Softwood Project - Land Trust. This Ruling, with the exception of paragraphs 35 to 37 of this Ruling, applies to the Agriwealth 2008 Softwood Project - Tree Project. 44. Upon acceptance of their Application, Growers will enter into a Forestry Management Agreement with Agriwealth Capital as the Manager (Manager). The Manager operates in its role under its Australian Financial Services Licence number 317238. 45. Growers will enter into a Timberlot Agreement with Agriwealth as Grantor. Under the Timberlot Agreement, Growers will be allocated a specific parcel of land which is evidenced by holding a Forestry Right Interest (FRI). 46. The Forestry Commission of New South Wales (Forests NSW) has been contracted to provide the silvicultural services over the life of the Project. Forests NSW is responsible for identifying suitable land, land preparation, planting, forest maintenance and harvesting. 47. A Timberlot is equivalent to a 0.5 plantable hectare. The initial cost per Timberlot is $10,320 for Initial Establishment Services and $880 for Planting Services. Growers must subscribe for a minimum of two (2) Timberlots. 48. There is no minimum subscription for this Project. 49. Each Timberlot will be planted with 500 to 550 trees by 30 June 2010. There is a guaranteed average survival rate of 425 trees per Timberlot across the plantation for the first 12 months after planting. 50. The allotment date is at the Manager's discretion but no later than 30 June 2008. 51. As well as entering a Forestry Investment, Growers or other entities may choose to participate in an investment with Agriwealth 2008 Softwood Project - Land Trust (Land Trust) which has been established to be the ultimate owner of the plantation land. Under the Information Memorandum, applicants are invited to subscribe for Units in the Land Trust at a cost of $3,000 per Unit with a minimum subscription of two (2) Units. It is not compulsory for a Grower to subscribe for Units in the Land Trust. 52. This Ruling applies to Growers who acquire two or more Timberlots only or to those Growers who acquire two or more Timberlots and Units in the Land Trust. This Ruling does not apply for investors who do not acquire Timberlots. | Constitution - Agriwealth 2008 Softwood Project - Tree Project (Plantation Constitution): 53. The Plantation Constitution establishes the Project and operates as a deed binding all Growers (clause 1.3). It sets out the terms and conditions under which Agriwealth Capital agrees to act as Manager. Growers are bound by the Plantation Constitution by virtue of their participation in the Project. 54. Under the terms of the Plantation Constitution, until an application is accepted, all application money received is to be placed into a bank account in the name of the Manager and held in accordance with the requirements of the Corporations Act 2001 (clause 2.5.1). After acceptance the money is held by the Manager as an agent, for and on behalf of, each applicant (clause 2.5.2). The Manager is required to establish and maintain a register of Growers (clause 16). 55. In summary, the Constitution also sets out provisions relating to: | Timberlot Agreement: 56. An interest in the land will be provided to Growers via the Timberlot Agreement between the Grantor and the Grower. The provisions of the agreement are incidental to a FRI with the intent that all the provisions are forestry covenants within the meaning of section 87A of the Conveyancing Act 1919 (NSW) (clause 1.1). 57. The Grower is required to pay the Grantor a Rental Fee equal to 11% of the net harvest proceeds to which the Grower is entitled from the Final Harvest (clause 3.2). 58. The Rental Fee will be calculated on the amount of any insurance proceeds received by the Grower in respect of a partial or total loss or destruction of the plantation produce on their Timberlot. The Rental Fee levied in relation to the insurance proceeds will be payable at the time the insurance proceeds are received. 59. Where no insurance proceeds are received by a Grower, in the event of a partial or total loss or destruction of the plantation produce, the Rental Fee will be calculated on the amount of Discounted Harvest proceeds (to be assessed by an independent forester at the time of the loss or destruction). 60. The Grower must use the Timberlots only for approved purposes and must establish, maintain, manage and harvest the plantation in accordance with sound forestry practice (clause 6.1). 61. The Timberlot Agreement will grant the Grower the right to maintain, manage and harvest a crop of trees on the Timberlot (clause 5.1.1). The Grower may also construct roads, tracks, bridges and other facilities on the land with written consent of the Landowner (clause 5.30. the Timberlot Agreement will give the Grower ownership of all trees on their Timberlots and all plantation produce from the land (clause 4.1). 62. The Grower must bear the harvesting costs (clause 9.6). 63. The Grower is responsible for rehabilitating the Timberlot following final harvest (clause 9.1). 64. The Grantor must not do anything on the Timberlots or on the adjacent land which would materially or adversely affect the plantation (clause 7.8). | Forestry Management Agreement: 65. The Grower engages Agriwealth Capital to act as Manager to perform forestry services in respect of the Timberlots. Growers are required to pay $10,320 Management Fee per Timberlot ($20,640 per minimum investment) for Initial Establishment Services and will pay $880 Management Fee per Timberlot ($1,760 per minimum investment) for Planting Services. 66. The Initial Establishment Services are for seasonally dependent agronomic activities to be conducted on or prior to 30 June 2009. The services include (schedule 1 clause 24): 67. Planting Services are to be conducted on or prior to 30 June 2010. Services include (schedule 1, clause 25): 68. The Manager is appointed to market and deal with the plantation produce at each thinning and final harvest. Ongoing forestry services will be performed at all times prior to final harvest. Ongoing Services include (schedule 1, clause 26): 69. Growers will appoint the Manager to act as their agent to market the plantation produce. Growers will authorise the Manager to consolidate and mix the plantation produce of their Timberlot with that of other Growers (clause 6.10.2). 70. Growers are entitled to all proceeds from the sale of the plantation produce net of all costs of harvesting and transportation (clause 6.10.2). 71. A Grower's share of produce will be calculated by reference to the size of the Grower's Timberlot land compared to the overall size of the plantation land of all growers adjusted for any Grower who has suffered a loss or destruction of plantation produce on their Timberlots (clause 9). 72. Growers who have suffered a loss or destruction of plantation produce will have their share of pooled plantation produce reduced by the pro rata amount of plantation produce lost or destroyed from their Timberlots (clause 9). | Forests NSW Agreement: 73. Forests NSW have been contracted to provide the silvicultural services for the term of the Project and to act as marketing agent for the Project. | Fees: 74. Under the terms of the Forestry Management Agreement and the Timberlot Agreement, a Grower will make payments as described below on a per Timberlot basis. | Finance: 75. A Grower who does not pay the Management Fee for Initial Establishment Services in full upon application can execute a Terms Agreement with Agriwealth Capital, borrow from United, or borrow from an independent lender external to the Project. 76. Only the finance arrangements set out below are covered by this Product Ruling. A Grower cannot rely on this Product Ruling if they enter into a finance arrangement with Agriwealth Capital or with United that materially differs from that set out in the documentation provided to the Tax Office with the application for this Product Ruling. A Grower who enters into a finance arrangement with an independent lender external to the Project other than the Preferred Financier may request a private ruling on the deductibility or otherwise of interest incurred under finance arrangements not covered by this Product Ruling. 77. Other than where a Terms Payment Agreement is in place, Growers cannot rely on any part of this Ruling if the Management Fee for Initial Establishment Services is not paid in full on or before 30 June 2008 by the Grower or, on the Grower's behalf, by a lending institution. Where an application is accepted subject to finance approval by United, Growers cannot rely on this Ruling if the funds have not been made available to Agriwealth Capital by 30 June 2008. | Terms Payment Agreement: 78. Details of the Terms Payment Agreement offered to Growers by Agriwealth Capital are set out in the Finance Facility (Agriwealth 2008 Softwood Project) documents. The Terms Payment Agreement is summarised as follows: | Finance offered by United: 79. A Grower can finance the cost of their Management Fees for Initial Establishment Services and Planting Services and the cost of subscription for Units in the Land Trust by borrowing that amount from United. The United documents are summarised as follows: 80. Growers cannot rely on this Product Ruling if they enter into a finance agreement with United that materially differs from that set out in the information provided to the Tax Office with the application for this Product Ruling. 81. This Ruling does not apply if the finance arrangement entered into by the Grower includes or has any of the following features: Commissioner of Taxation 5 March 2008 | Is the Grower carrying on a business?: 82. For the amounts set out in paragraphs 23 and 27 of this Ruling to constitute allowable deductions the Grower's afforestation activities as a participant in the Agriwealth 2008 Softwood Project must amount to the carrying on of a business of primary production. 83. Two Taxation Rulings are relevant in determining whether a Grower will be carrying on a business of primary production. 84. The general indicators used by the Courts are set out in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? 85. Taxation Ruling TR 2000/8 Income tax: investment schemes, particularly paragraph 89, is more specific to arrangements such as the Agriwealth 2008 Softwood Project. As Taxation Ruling TR 2000/8 sets out, the relevant principles have been established in court decisions such as Commissioner of Taxation v. Lau (1984) 6 FCR 202; 84 ATC 4929; (1984) 16 ATR 55. 86. Having applied these principles to the arrangement set out above, a Grower in the Agriwealth 2008 Softwood Project is accepted to be carrying on a business of growing and harvesting Radiata Pine for sale. | Section 8-1: 87. The Management Fees for Initial Establishment Services and Planting Services and interest on loans with United are deductible under section 8-1 (see paragraphs 43 and 44 of TR 2000/8). A 'non-income producing' purpose (see paragraphs 47 and 48 of TR 2000/8) is not identifiable in the arrangement and there is no capital component evident in the Management Fees for Initial Establishment Services and Planting Services (see paragraphs 49 to 51 of TR 2000/8). 88. The tests of deductibility under the first limb of section 8-1 are met. The exclusions do not apply. Subject to the prepayment provisions (see paragraphs 91 to 101 of this Ruling) a deduction for these amounts can be claimed in the year in which they are incurred. (Note: the meaning of incurred is explained in Taxation Ruling TR 97/7.) 89. Some Growers may finance their participation in the Project through a Loan Agreement with United. Applying the same principles as that used for the Management Fees for Initial Establishment Services and Planting Services, interest incurred under such a loan has sufficient connection with the gaining of assessable income to be deductible under section 8-1. 90. Other than where the prepayment provisions apply (see paragraphs 91 to 95 of this Ruling), a Grower can claim a deduction for such interest in the year in which it is incurred. | Sections 82KZL, 82KZME, 82KZMF and 82KZMG: 91. The prepayment provisions contained in Subdivision H of Division 3 of Part III of the ITAA 1936 affect the timing of deductions for certain prepaid expenditure. These provisions apply to certain expenditure incurred under an agreement in return for the doing of a thing under the agreement (for example, the performance of management services or the leasing of land) that will not be wholly done within the same year of income as the year in which the expenditure is incurred. If expenditure is incurred to cover the provision of services to be provided within the same income year, then it is not expenditure to which the prepayment rules apply. 92. For this Project, the only prepayment provisions that are relevant are section 82KZL of the ITAA 1936 (an interpretive provision) and section 82KZMG of the ITAA 1936 (an operative provision). References to sections 82KZME and 82KZMF of the ITAA 1936 are made only in respect of their interaction with section 82KZMG of the ITAA 1936 and to confirm that these provisions have no application to expenditure incurred by Growers who participate in the scheme set out in this Ruling. | Sections 82KZME and 82KZMF: 93. Other than the Management Fees for Initial Establishment Services and Planting Services (see below), the fees payable under the scheme to which this Product Ruling applies are payable only out of harvest proceeds and the interest payable to United is incurred monthly in arrears. Accordingly, the prepayment provisions in sections 82KZME and 82KZMF of the ITAA 1936 have no application. 94. However, sections 82KZME and 82KZMF of the ITAA 1936 may have relevance if a Grower in this Project chooses or is required to prepay interest under a loan agreement (including loan agreements with lenders other than United). 95. As stated in Note (iv) of paragraph 27 of this Ruling, prepayments of interest are not covered by this Product Ruling and Growers who make such prepayments may instead request a private ruling on the tax consequences of the prepaid interest. | Section 82KZMG: 96. Expenditure that meets the requirements of section 82KZMG of the ITAA 1936 is excluded from the application of the prepayment rules in sections 82KZME and 82KZMF of the ITAA 1936 that would otherwise apply. 97. Section 82KZMG provides a '12 month rule' that, in effect, facilitates an immediate deduction for certain prepaid expenditure [5] incurred under an 'agreement for planting and tending trees for felling' (subsection 82KZMG(3) of the ITAA 1936). 98. The 12 month rule applies to expenditure for 'seasonally dependent agronomic activities' that will be carried out during the establishment period of a particular planting of trees (subsection 82KZMG(4) of the ITAA 1936). Seasonally dependent agronomic activities are explained in Taxation Determination TD 2003/12. 99. Whilst the establishment period itself may exceed 12 months, each seasonally dependent agronomic activity must be completed within 12 months of commencement of its eligible service period (as defined in subsection 82KZL(1) of the ITAA 1936), and by the end of the income year following the 'expenditure year' (see subsections 82KZMG(1) and (2) of the ITAA 1936). 100. Under the Forestry Management Agreement each Grower incurs a Management Fee of $10,320 per Timberlot for Initial Establishment Services in the income year ended 30 June 2008 for 'seasonally dependent agronomic activities' that will be carried out during the 'establishment period' of the Trees. 101. The expenditure for 'seasonally dependent agronomic activities' meets all other requirements of section 82KZMG of the ITAA 1936 and, therefore, other than where section 82KZMGA applies (see paragraphs 102 to 104 of this Ruling), a deduction is allowable in the income year ended 30 June 2008 for the full amount of expenditure incurred by the Grower for the fees for Initial Establishment Services. | Section 82KZMGA: 102. A Grower who is an initial participant in the Project cannot deduct an amount that meets the requirements of section 82KZMG of the ITAA 1936 if a 'CGT event' happens in relation to the Grower's interest within 4 years of 30 June 2008 (subsection 82KZMGA(1) of the ITAA 1936). In this Project, only the fees for the Initial Establishment Services meet the requirements of section 82KZMG of the ITAA 1936. Accordingly, the deduction of $10,320 per 'interest' for the Management Fee for Initial Establishment Services will not be allowable if a 'CGT event' happens to the Grower's interest within the 4 year period. 103. Where subsection 82KZMGA(1) of the ITAA 1936 applies, the Commissioner may amend any affected Grower's assessment within 2 years after the end of the income year in which the 'CGT event' happens. The Commissioner's power to amend in these circumstances applies despite section 170 of the ITAA 1936 (subsection 82KZMGA(2) of the ITAA 1936) 104. A Grower whose deduction for the Management Fee for the Initial Establishment Services is disallowed because of section 82KZMGA is still required to include in their assessable income either the market value of the interest at the time of the 'CGT event', or the decrease in the market value of the interest as a result of the 'CGT event' (section 82KZMGB of the ITAA 1936). | Sections 6-10, 10-5 and 118-20 of the ITAA 1997 and section 82KZMGB of the ITAA 1936: 105. Section 6-10 includes in assessable income amounts that do not constitute ordinary income. These amounts, called statutory income, are listed in the table in section 10-5 and include amounts that are included in the assessable income of a Grower by section 82KZMGB of the ITAA 1936. | Section 82KZMGB: 106. Where a 'CGT event' (other than for a 'CGT event' in respect of a thinning) [6] happens to an interest held by a Grower who is an initial participant in this Project, section 82KZMGB includes an amount in the assessable income of the Grower if: | Market value rule applies to 'CGT events': 107. If, as a result of the 'CGT event' the Grower either: then the market value of the interest at the time of the event, or the decrease in market value of the interest as a result of the event, is included in the assessable income of the Grower (subsection 82KZMGB(2) of the ITAA 1936). A market value rule applies rather than the amount of money actually received from the CGT event (subsection 82KZMGB(3) of the ITAA 1936). However, the market value and the actual amount of money received may be the same. 108. The market value amount included in the assessable income of a Grower is the value of the interest just before the 'CGT event', or where the Grower continues to hold their interest after the 'CGT event', the amount by which the market value of the interest is reduced by the 'CGT event' (subsection 82KZMGB(2) of the ITAA 1936). 109. This provision will apply where the interest is sold, is extinguished, or ceases, and will include 'CGT events' such as a full or partial sale of the interest or from a full or partial clear-fell harvest of the trees grown under the Project. | Section 118-20: 110. Generally, where as a result of a 'CGT event' a capital gain would otherwise be included in a taxpayer's assessable income, section 118-20 will apply to reduce the capital gain if, because of the event, a provision of the income tax law other than the CGT provisions includes an amount in the taxpayer's assessable income. 111. In the case of interests held by Growers who are initial participants in this Project the market value, or the reduction in the market value of the interest from a CGT event is included in assessable income by section 6-10 of the ITAA 1997 and section 82KZMGB of the ITAA 1936. Therefore, section 118-20 of the ITAA 1997 will operate to reduce to nil any capital gain that would otherwise be assessable under the CGT provisions in Part 3-1 of the ITAA 1997. | Section 6-5: 112. Section 82KZMGB of the ITAA 1936 specifically excludes from its operation a 'CGT event' that happens in respect of a thinning (see paragraph 82KZMGB(1)(d) of the ITAA 1936). 113. Thinning amounts received by a Grower who is an initial participant in this Project do not arise as a result of a 'CGT event' and are not otherwise assessable under section 82KZMGB of the ITAA 1936. The receipt of an amount arising from a thinning of the Project trees is a distribution that arises as an incident of the Grower holding an interest in the Project. It is an item of ordinary income and is assessable under section 6-5 in the year in which it is derived. | Section 25-25: 114. A deduction is allowable for expenditure incurred by a Grower in borrowing money to the extent that the borrowed money is used for the purpose of producing assessable income (subsection 25-25(1)). 115. In this Project the loan application fee payable to United is incurred to borrow money that is used or is to be used solely for income producing purposes during each income year over the term of the loan. 116. The deduction for the borrowing expense is spread over the period of the loan or 5 years, whichever is the shorter (subsection 25-25(4)). | Sections 35-10 and 35-55 - deferral of losses from non-commercial business activities and the Commissioner's discretion: 117. In deciding to exercise the discretion in paragraph 35-55(1)(b) on a conditional basis for 30 June 2008 to 30 June 2036, 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, the Commissioner has determined that for those income years: 118. A Grower who would otherwise be required to defer a loss arising from their participation in the Project under subsection 35-10(2) until a later income year is able to offset that loss against their other assessable income. 119. The exercise of the Commissioner's discretion under paragraph 35-55(1)(b) 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. | Section 82KL - recouped expenditure: 120. The operation of section 82KL of the ITAA 1936 depends, among other things, on the identification of a certain quantum of 'additional benefits(s)'. Insufficient 'additional benefits' will be provided to trigger the application of section 82KL of the ITAA 1936. It will not apply to deny the deduction otherwise allowable under section 8-1 of the ITAA 1997. | Part IVA - general tax avoidance provisions: 121. For Part IVA of the ITAA 1936 to apply there must be a 'scheme' (section 177A), a 'tax benefit' (section 177C) and a dominant purpose of entering into the scheme to obtain a tax benefit (section 177D). 122. The Agriwealth 2008 Softwood Project will be a 'scheme'. A Grower will obtain a 'tax benefit' from entering into the scheme, in the form of tax deductions for the amounts detailed at paragraph 23 and 27 of this Ruling that would not have been obtained but for the scheme. However, it is not possible to conclude the scheme will be entered into or carried out with the dominant purpose of obtaining this tax benefit. 123. Growers to whom this Ruling applies intend to stay in the scheme for its full term and derive assessable income from the harvesting and sale of the timber. There are no facts that would suggest that Growers have the opportunity of obtaining a tax advantage other than the tax advantages identified in this Ruling. There is no non-recourse financing or round robin characteristics, and no indication that the parties are not dealing at arm's length or, if any parties are not dealing at arm's length, that any adverse tax consequences result. Further, having regard to the factors to be considered under paragraph 177D(b) of the ITAA 1936 it cannot be concluded, on the information available, that participants will enter into the scheme for the dominant purpose of obtaining a tax benefit. 124. The following is a detailed contents list for this Ruling: Not previously issued as a draft

Ruling: 19. Subject to the stated qualifications, this part of the Product Ruling sets out in detail the taxation obligations and benefits for a Grower in the defined class of entities who enters into the scheme described at paragraphs 38 to 81 of this Ruling. 20. The Grower's participation in the Project must constitute the carrying on of business of primary production. Provided the Project is carried out as described below, the Grower's business of primary production will commence at the time of execution of their Forestry Management Agreement and Timberlot Agreement, on or before 30 June 2008. Concessions for 'small business entities' [2] 21. From the 2007-08 income year, a range of concessions previously available under the simplified tax system (STS), will be available to an entity if it carries on a business and satisfies the $2 million aggregated turnover test (a 'small business entity'). 22. A 'small business entity' can choose the concessions that best suit its needs. Eligibility for some small business concessions is also dependent on satisfying some additional conditions. Because of these choices and the eligibility conditions the application of the small business concessions to Growers who qualify as a 'small business entity' is not able to be dealt with in this Ruling. | Section 8-1 and Division 27 of the ITAA 1997 and section 82KZMG of the Income Tax Assessment Act 1936: 23. Other than where a 'CGT event' [3] happens to their interest within 4 years of 30 June 2008 (see paragraph 25 of this Ruling), a Grower who is an initial participant in the scheme may claim tax deductions for the following amount on a per Timberlot basis. | Section 82KZMGA: 24. A deduction for the Management Fee for Initial Establishment Services is not allowable where a 'CGT event' happens in relation to a Grower's interest before 1 July 2012 (subsection 82KZMGA(1) of the ITAA 1936). 25. Where deductions for these amounts have already been claimed by a Grower the Commissioner may amend their assessment at any time within two years after the end of the income year in which the 'CGT event' happens. The Commissioner's power to amend in these circumstances applies despite section 170 of the ITAA 1936 (subsection 82KZMGA(2) of the ITAA 1936). 26. Growers whose deductions are disallowed are still required to include in their assessable income the market value of the interest at the time of the 'CGT event' or the decrease in the market value of the interest as a result of the 'CGT event' (see paragraphs 102 to 104 of this Ruling). | Sections 8-1 and 25-25 and Division 27: 27. A Grower who is an initial participant in the scheme may also claim tax deductions for the following fees and expenses on a per Timberlot basis, as set out in the Table: | Sections 6-10, 17-5 and 118-20 of the ITAA 1997 and section 82KZMGB of the ITAA 1936: 28. Where a 'CGT event' (other than a 'CGT event' in respect of a thinning [4] - see paragraph 32 of this Ruling) happens to the interest held by a Grower who is an initial participant in this Project, the market value of the interest, or the decrease in the market value of the interest, is included in the Grower's assessable income (section 6-10 of the ITAA 1997 and section 82KZMGB of the ITAA 1936), less any GST payable on those proceeds (section 17-5 of the ITAA 1997). 29. The amount is included in the Grower's assessable income in the income year in which the 'CGT event' happens (subsection 82KZMGB(2) of the ITAA 1936). 30. 'CGT events' for these purposes include those relating to: 31. Where an amount arising from a 'CGT event' is included in the assessable income of a Grower by section 82KZMGB the anti-overlap provisions in section 118-20 will operate to exclude that amount from the capital gains provisions in Part 3-1. | Sections 6-5 and 17-5: 32. An amount received by a Grower in respect of a thinning of the trees grown in this Project is not an amount received as a result of a 'CGT event' and is not otherwise assessable under section 82KZMGB of the ITAA 1936. The amount is a distribution of ordinary income that arises as an incident of the Grower holding an interest in the Project. Growers include amounts received for thinning the trees in their assessable income in the income year in which the amounts are derived (section 6-5 of the ITAA 1997) less any GST payable on those proceeds (section 17-5 of the ITAA 1997). | Section 35-55 - exercise of Commissioner's discretion: 33. A Grower who is an individual accepted into the Project in the year ended 30 June 2008 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 above, the Commissioner will exercise the discretion in paragraph 35-55(1)(b) for Growers for the income years ended 30 June 2008 to 30 June 2036 . 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. | Sections 82KZME, 82KZMF and 82KL and Part IVA: 34. For a Grower who commences participation in the Project and incurs expenditure as required by Forestry Management Agreement and Timberlot Agreement, the following provisions of the ITAA 1936 have application as indicated: | Part 3-1 of the ITAA 1997 and Division 6 of Part III of the ITAA 1936: 35. Growers may also acquire Units in the Land Trust. The Units are CGT Assets (section 108-5) and the amounts payable for the Units upon subscription constitute an outgoing of capital and are not allowable as a deduction. 36. The amount paid for each Unit will represent the first element of the cost base of the Units (subsection 110-25(2)). The disposal of the Units by the Unit Holder will be a CGT Event and may give rise to a capital gain or loss. 37. Distributions to the Unit Holder by the Trustee of the Land Trust may be income distributions that are included in the assessable income of a Grower who is a Unit Holder in accordance with Division 6 of Part III of the ITAA 1936 or may be non assessable amounts that give rise to CGT Event E4 (section 104-70 of the ITAA 1997). 38. The scheme that is the subject of this Ruling is specified below. This scheme incorporates the following: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 39. The documents highlighted are those that a Grower may enter into. For the purposes of describing the scheme to which this Ruling applies, there are no other agreements, whether formal or informal, and whether or not legally enforceable, which a Grower, or any associate of a Grower, will be a party to, which are a part of the scheme. 40. In accordance with the above documents, a Grower who participates in the scheme must be a wholesale client. This Ruling does not apply unless the Grower is a wholesale client as defined in section 761G of the Corporations Act 2001 . The meaning of wholesale client is explained in the Information Memorandum for this Project. 41. All Australian Securities and Investment Commission (ASIC) requirements are, or will be, complied with for the term of the agreements. 42. The main features of the Agriwealth 2008 Softwood Project are as follows: | The Project: 43. Under the Information Memorandum, applicants are invited to participate in the Agriwealth 2008 Softwood Project - Tree Project and subscribe for Units in the Agriwealth 2008 Softwood Project - Land Trust. This Ruling, with the exception of paragraphs 35 to 37 of this Ruling, applies to the Agriwealth 2008 Softwood Project - Tree Project. 44. Upon acceptance of their Application, Growers will enter into a Forestry Management Agreement with Agriwealth Capital as the Manager (Manager). The Manager operates in its role under its Australian Financial Services Licence number 317238. 45. Growers will enter into a Timberlot Agreement with Agriwealth as Grantor. Under the Timberlot Agreement, Growers will be allocated a specific parcel of land which is evidenced by holding a Forestry Right Interest (FRI). 46. The Forestry Commission of New South Wales (Forests NSW) has been contracted to provide the silvicultural services over the life of the Project. Forests NSW is responsible for identifying suitable land, land preparation, planting, forest maintenance and harvesting. 47. A Timberlot is equivalent to a 0.5 plantable hectare. The initial cost per Timberlot is $10,320 for Initial Establishment Services and $880 for Planting Services. Growers must subscribe for a minimum of two (2) Timberlots. 48. There is no minimum subscription for this Project. 49. Each Timberlot will be planted with 500 to 550 trees by 30 June 2010. There is a guaranteed average survival rate of 425 trees per Timberlot across the plantation for the first 12 months after planting. 50. The allotment date is at the Manager's discretion but no later than 30 June 2008. 51. As well as entering a Forestry Investment, Growers or other entities may choose to participate in an investment with Agriwealth 2008 Softwood Project - Land Trust (Land Trust) which has been established to be the ultimate owner of the plantation land. Under the Information Memorandum, applicants are invited to subscribe for Units in the Land Trust at a cost of $3,000 per Unit with a minimum subscription of two (2) Units. It is not compulsory for a Grower to subscribe for Units in the Land Trust. 52. This Ruling applies to Growers who acquire two or more Timberlots only or to those Growers who acquire two or more Timberlots and Units in the Land Trust. This Ruling does not apply for investors who do not acquire Timberlots. | Constitution - Agriwealth 2008 Softwood Project - Tree Project (Plantation Constitution): 53. The Plantation Constitution establishes the Project and operates as a deed binding all Growers (clause 1.3). It sets out the terms and conditions under which Agriwealth Capital agrees to act as Manager. Growers are bound by the Plantation Constitution by virtue of their participation in the Project. 54. Under the terms of the Plantation Constitution, until an application is accepted, all application money received is to be placed into a bank account in the name of the Manager and held in accordance with the requirements of the Corporations Act 2001 (clause 2.5.1). After acceptance the money is held by the Manager as an agent, for and on behalf of, each applicant (clause 2.5.2). The Manager is required to establish and maintain a register of Growers (clause 16). 55. In summary, the Constitution also sets out provisions relating to: | Timberlot Agreement: 56. An interest in the land will be provided to Growers via the Timberlot Agreement between the Grantor and the Grower. The provisions of the agreement are incidental to a FRI with the intent that all the provisions are forestry covenants within the meaning of section 87A of the Conveyancing Act 1919 (NSW) (clause 1.1). 57. The Grower is required to pay the Grantor a Rental Fee equal to 11% of the net harvest proceeds to which the Grower is entitled from the Final Harvest (clause 3.2). 58. The Rental Fee will be calculated on the amount of any insurance proceeds received by the Grower in respect of a partial or total loss or destruction of the plantation produce on their Timberlot. The Rental Fee levied in relation to the insurance proceeds will be payable at the time the insurance proceeds are received. 59. Where no insurance proceeds are received by a Grower, in the event of a partial or total loss or destruction of the plantation produce, the Rental Fee will be calculated on the amount of Discounted Harvest proceeds (to be assessed by an independent forester at the time of the loss or destruction). 60. The Grower must use the Timberlots only for approved purposes and must establish, maintain, manage and harvest the plantation in accordance with sound forestry practice (clause 6.1). 61. The Timberlot Agreement will grant the Grower the right to maintain, manage and harvest a crop of trees on the Timberlot (clause 5.1.1). The Grower may also construct roads, tracks, bridges and other facilities on the land with written consent of the Landowner (clause 5.30. the Timberlot Agreement will give the Grower ownership of all trees on their Timberlots and all plantation produce from the land (clause 4.1). 62. The Grower must bear the harvesting costs (clause 9.6). 63. The Grower is responsible for rehabilitating the Timberlot following final harvest (clause 9.1). 64. The Grantor must not do anything on the Timberlots or on the adjacent land which would materially or adversely affect the plantation (clause 7.8). | Forestry Management Agreement: 65. The Grower engages Agriwealth Capital to act as Manager to perform forestry services in respect of the Timberlots. Growers are required to pay $10,320 Management Fee per Timberlot ($20,640 per minimum investment) for Initial Establishment Services and will pay $880 Management Fee per Timberlot ($1,760 per minimum investment) for Planting Services. 66. The Initial Establishment Services are for seasonally dependent agronomic activities to be conducted on or prior to 30 June 2009. The services include (schedule 1 clause 24): 67. Planting Services are to be conducted on or prior to 30 June 2010. Services include (schedule 1, clause 25): 68. The Manager is appointed to market and deal with the plantation produce at each thinning and final harvest. Ongoing forestry services will be performed at all times prior to final harvest. Ongoing Services include (schedule 1, clause 26): 69. Growers will appoint the Manager to act as their agent to market the plantation produce. Growers will authorise the Manager to consolidate and mix the plantation produce of their Timberlot with that of other Growers (clause 6.10.2). 70. Growers are entitled to all proceeds from the sale of the plantation produce net of all costs of harvesting and transportation (clause 6.10.2). 71. A Grower's share of produce will be calculated by reference to the size of the Grower's Timberlot land compared to the overall size of the plantation land of all growers adjusted for any Grower who has suffered a loss or destruction of plantation produce on their Timberlots (clause 9). 72. Growers who have suffered a loss or destruction of plantation produce will have their share of pooled plantation produce reduced by the pro rata amount of plantation produce lost or destroyed from their Timberlots (clause 9). | Forests NSW Agreement: 73. Forests NSW have been contracted to provide the silvicultural services for the term of the Project and to act as marketing agent for the Project. | Fees: 74. Under the terms of the Forestry Management Agreement and the Timberlot Agreement, a Grower will make payments as described below on a per Timberlot basis. | Finance: 75. A Grower who does not pay the Management Fee for Initial Establishment Services in full upon application can execute a Terms Agreement with Agriwealth Capital, borrow from United, or borrow from an independent lender external to the Project. 76. Only the finance arrangements set out below are covered by this Product Ruling. A Grower cannot rely on this Product Ruling if they enter into a finance arrangement with Agriwealth Capital or with United that materially differs from that set out in the documentation provided to the Tax Office with the application for this Product Ruling. A Grower who enters into a finance arrangement with an independent lender external to the Project other than the Preferred Financier may request a private ruling on the deductibility or otherwise of interest incurred under finance arrangements not covered by this Product Ruling. 77. Other than where a Terms Payment Agreement is in place, Growers cannot rely on any part of this Ruling if the Management Fee for Initial Establishment Services is not paid in full on or before 30 June 2008 by the Grower or, on the Grower's behalf, by a lending institution. Where an application is accepted subject to finance approval by United, Growers cannot rely on this Ruling if the funds have not been made available to Agriwealth Capital by 30 June 2008. | Terms Payment Agreement: 78. Details of the Terms Payment Agreement offered to Growers by Agriwealth Capital are set out in the Finance Facility (Agriwealth 2008 Softwood Project) documents. The Terms Payment Agreement is summarised as follows: | Finance offered by United: 79. A Grower can finance the cost of their Management Fees for Initial Establishment Services and Planting Services and the cost of subscription for Units in the Land Trust by borrowing that amount from United. The United documents are summarised as follows: 80. Growers cannot rely on this Product Ruling if they enter into a finance agreement with United that materially differs from that set out in the information provided to the Tax Office with the application for this Product Ruling. 81. This Ruling does not apply if the finance arrangement entered into by the Grower includes or has any of the following features: Commissioner of Taxation 5 March 2008 | Is the Grower carrying on a business?: 82. For the amounts set out in paragraphs 23 and 27 of this Ruling to constitute allowable deductions the Grower's afforestation activities as a participant in the Agriwealth 2008 Softwood Project must amount to the carrying on of a business of primary production. 83. Two Taxation Rulings are relevant in determining whether a Grower will be carrying on a business of primary production. 84. The general indicators used by the Courts are set out in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? 85. Taxation Ruling TR 2000/8 Income tax: investment schemes, particularly paragraph 89, is more specific to arrangements such as the Agriwealth 2008 Softwood Project. As Taxation Ruling TR 2000/8 sets out, the relevant principles have been established in court decisions such as Commissioner of Taxation v. Lau (1984) 6 FCR 202; 84 ATC 4929; (1984) 16 ATR 55. 86. Having applied these principles to the arrangement set out above, a Grower in the Agriwealth 2008 Softwood Project is accepted to be carrying on a business of growing and harvesting Radiata Pine for sale. | Section 8-1: 87. The Management Fees for Initial Establishment Services and Planting Services and interest on loans with United are deductible under section 8-1 (see paragraphs 43 and 44 of TR 2000/8). A 'non-income producing' purpose (see paragraphs 47 and 48 of TR 2000/8) is not identifiable in the arrangement and there is no capital component evident in the Management Fees for Initial Establishment Services and Planting Services (see paragraphs 49 to 51 of TR 2000/8). 88. The tests of deductibility under the first limb of section 8-1 are met. The exclusions do not apply. Subject to the prepayment provisions (see paragraphs 91 to 101 of this Ruling) a deduction for these amounts can be claimed in the year in which they are incurred. (Note: the meaning of incurred is explained in Taxation Ruling TR 97/7.) 89. Some Growers may finance their participation in the Project through a Loan Agreement with United. Applying the same principles as that used for the Management Fees for Initial Establishment Services and Planting Services, interest incurred under such a loan has sufficient connection with the gaining of assessable income to be deductible under section 8-1. 90. Other than where the prepayment provisions apply (see paragraphs 91 to 95 of this Ruling), a Grower can claim a deduction for such interest in the year in which it is incurred. | Sections 82KZL, 82KZME, 82KZMF and 82KZMG: 91. The prepayment provisions contained in Subdivision H of Division 3 of Part III of the ITAA 1936 affect the timing of deductions for certain prepaid expenditure. These provisions apply to certain expenditure incurred under an agreement in return for the doing of a thing under the agreement (for example, the performance of management services or the leasing of land) that will not be wholly done within the same year of income as the year in which the expenditure is incurred. If expenditure is incurred to cover the provision of services to be provided within the same income year, then it is not expenditure to which the prepayment rules apply. 92. For this Project, the only prepayment provisions that are relevant are section 82KZL of the ITAA 1936 (an interpretive provision) and section 82KZMG of the ITAA 1936 (an operative provision). References to sections 82KZME and 82KZMF of the ITAA 1936 are made only in respect of their interaction with section 82KZMG of the ITAA 1936 and to confirm that these provisions have no application to expenditure incurred by Growers who participate in the scheme set out in this Ruling. | Sections 82KZME and 82KZMF: 93. Other than the Management Fees for Initial Establishment Services and Planting Services (see below), the fees payable under the scheme to which this Product Ruling applies are payable only out of harvest proceeds and the interest payable to United is incurred monthly in arrears. Accordingly, the prepayment provisions in sections 82KZME and 82KZMF of the ITAA 1936 have no application. 94. However, sections 82KZME and 82KZMF of the ITAA 1936 may have relevance if a Grower in this Project chooses or is required to prepay interest under a loan agreement (including loan agreements with lenders other than United). 95. As stated in Note (iv) of paragraph 27 of this Ruling, prepayments of interest are not covered by this Product Ruling and Growers who make such prepayments may instead request a private ruling on the tax consequences of the prepaid interest. | Section 82KZMG: 96. Expenditure that meets the requirements of section 82KZMG of the ITAA 1936 is excluded from the application of the prepayment rules in sections 82KZME and 82KZMF of the ITAA 1936 that would otherwise apply. 97. Section 82KZMG provides a '12 month rule' that, in effect, facilitates an immediate deduction for certain prepaid expenditure [5] incurred under an 'agreement for planting and tending trees for felling' (subsection 82KZMG(3) of the ITAA 1936). 98. The 12 month rule applies to expenditure for 'seasonally dependent agronomic activities' that will be carried out during the establishment period of a particular planting of trees (subsection 82KZMG(4) of the ITAA 1936). Seasonally dependent agronomic activities are explained in Taxation Determination TD 2003/12. 99. Whilst the establishment period itself may exceed 12 months, each seasonally dependent agronomic activity must be completed within 12 months of commencement of its eligible service period (as defined in subsection 82KZL(1) of the ITAA 1936), and by the end of the income year following the 'expenditure year' (see subsections 82KZMG(1) and (2) of the ITAA 1936). 100. Under the Forestry Management Agreement each Grower incurs a Management Fee of $10,320 per Timberlot for Initial Establishment Services in the income year ended 30 June 2008 for 'seasonally dependent agronomic activities' that will be carried out during the 'establishment period' of the Trees. 101. The expenditure for 'seasonally dependent agronomic activities' meets all other requirements of section 82KZMG of the ITAA 1936 and, therefore, other than where section 82KZMGA applies (see paragraphs 102 to 104 of this Ruling), a deduction is allowable in the income year ended 30 June 2008 for the full amount of expenditure incurred by the Grower for the fees for Initial Establishment Services. | Section 82KZMGA: 102. A Grower who is an initial participant in the Project cannot deduct an amount that meets the requirements of section 82KZMG of the ITAA 1936 if a 'CGT event' happens in relation to the Grower's interest within 4 years of 30 June 2008 (subsection 82KZMGA(1) of the ITAA 1936). In this Project, only the fees for the Initial Establishment Services meet the requirements of section 82KZMG of the ITAA 1936. Accordingly, the deduction of $10,320 per 'interest' for the Management Fee for Initial Establishment Services will not be allowable if a 'CGT event' happens to the Grower's interest within the 4 year period. 103. Where subsection 82KZMGA(1) of the ITAA 1936 applies, the Commissioner may amend any affected Grower's assessment within 2 years after the end of the income year in which the 'CGT event' happens. The Commissioner's power to amend in these circumstances applies despite section 170 of the ITAA 1936 (subsection 82KZMGA(2) of the ITAA 1936) 104. A Grower whose deduction for the Management Fee for the Initial Establishment Services is disallowed because of section 82KZMGA is still required to include in their assessable income either the market value of the interest at the time of the 'CGT event', or the decrease in the market value of the interest as a result of the 'CGT event' (section 82KZMGB of the ITAA 1936). | Sections 6-10, 10-5 and 118-20 of the ITAA 1997 and section 82KZMGB of the ITAA 1936: 105. Section 6-10 includes in assessable income amounts that do not constitute ordinary income. These amounts, called statutory income, are listed in the table in section 10-5 and include amounts that are included in the assessable income of a Grower by section 82KZMGB of the ITAA 1936. | Section 82KZMGB: 106. Where a 'CGT event' (other than for a 'CGT event' in respect of a thinning) [6] happens to an interest held by a Grower who is an initial participant in this Project, section 82KZMGB includes an amount in the assessable income of the Grower if: | Market value rule applies to 'CGT events': 107. If, as a result of the 'CGT event' the Grower either: then the market value of the interest at the time of the event, or the decrease in market value of the interest as a result of the event, is included in the assessable income of the Grower (subsection 82KZMGB(2) of the ITAA 1936). A market value rule applies rather than the amount of money actually received from the CGT event (subsection 82KZMGB(3) of the ITAA 1936). However, the market value and the actual amount of money received may be the same. 108. The market value amount included in the assessable income of a Grower is the value of the interest just before the 'CGT event', or where the Grower continues to hold their interest after the 'CGT event', the amount by which the market value of the interest is reduced by the 'CGT event' (subsection 82KZMGB(2) of the ITAA 1936). 109. This provision will apply where the interest is sold, is extinguished, or ceases, and will include 'CGT events' such as a full or partial sale of the interest or from a full or partial clear-fell harvest of the trees grown under the Project. | Section 118-20: 110. Generally, where as a result of a 'CGT event' a capital gain would otherwise be included in a taxpayer's assessable income, section 118-20 will apply to reduce the capital gain if, because of the event, a provision of the income tax law other than the CGT provisions includes an amount in the taxpayer's assessable income. 111. In the case of interests held by Growers who are initial participants in this Project the market value, or the reduction in the market value of the interest from a CGT event is included in assessable income by section 6-10 of the ITAA 1997 and section 82KZMGB of the ITAA 1936. Therefore, section 118-20 of the ITAA 1997 will operate to reduce to nil any capital gain that would otherwise be assessable under the CGT provisions in Part 3-1 of the ITAA 1997. | Section 6-5: 112. Section 82KZMGB of the ITAA 1936 specifically excludes from its operation a 'CGT event' that happens in respect of a thinning (see paragraph 82KZMGB(1)(d) of the ITAA 1936). 113. Thinning amounts received by a Grower who is an initial participant in this Project do not arise as a result of a 'CGT event' and are not otherwise assessable under section 82KZMGB of the ITAA 1936. The receipt of an amount arising from a thinning of the Project trees is a distribution that arises as an incident of the Grower holding an interest in the Project. It is an item of ordinary income and is assessable under section 6-5 in the year in which it is derived. | Section 25-25: 114. A deduction is allowable for expenditure incurred by a Grower in borrowing money to the extent that the borrowed money is used for the purpose of producing assessable income (subsection 25-25(1)). 115. In this Project the loan application fee payable to United is incurred to borrow money that is used or is to be used solely for income producing purposes during each income year over the term of the loan. 116. The deduction for the borrowing expense is spread over the period of the loan or 5 years, whichever is the shorter (subsection 25-25(4)). | Sections 35-10 and 35-55 - deferral of losses from non-commercial business activities and the Commissioner's discretion: 117. In deciding to exercise the discretion in paragraph 35-55(1)(b) on a conditional basis for 30 June 2008 to 30 June 2036, 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, the Commissioner has determined that for those income years: 118. A Grower who would otherwise be required to defer a loss arising from their participation in the Project under subsection 35-10(2) until a later income year is able to offset that loss against their other assessable income. 119. The exercise of the Commissioner's discretion under paragraph 35-55(1)(b) 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. | Section 82KL - recouped expenditure: 120. The operation of section 82KL of the ITAA 1936 depends, among other things, on the identification of a certain quantum of 'additional benefits(s)'. Insufficient 'additional benefits' will be provided to trigger the application of section 82KL of the ITAA 1936. It will not apply to deny the deduction otherwise allowable under section 8-1 of the ITAA 1997. | Part IVA - general tax avoidance provisions: 121. For Part IVA of the ITAA 1936 to apply there must be a 'scheme' (section 177A), a 'tax benefit' (section 177C) and a dominant purpose of entering into the scheme to obtain a tax benefit (section 177D). 122. The Agriwealth 2008 Softwood Project will be a 'scheme'. A Grower will obtain a 'tax benefit' from entering into the scheme, in the form of tax deductions for the amounts detailed at paragraph 23 and 27 of this Ruling that would not have been obtained but for the scheme. However, it is not possible to conclude the scheme will be entered into or carried out with the dominant purpose of obtaining this tax benefit. 123. Growers to whom this Ruling applies intend to stay in the scheme for its full term and derive assessable income from the harvesting and sale of the timber. There are no facts that would suggest that Growers have the opportunity of obtaining a tax advantage other than the tax advantages identified in this Ruling. There is no non-recourse financing or round robin characteristics, and no indication that the parties are not dealing at arm's length or, if any parties are not dealing at arm's length, that any adverse tax consequences result. Further, having regard to the factors to be considered under paragraph 177D(b) of the ITAA 1936 it cannot be concluded, on the information available, that participants will enter into the scheme for the dominant purpose of obtaining a tax benefit. 124. The following is a detailed contents list for this Ruling: Not previously issued as a draft


Appendix: Is the Grower carrying on a business?: 82. For the amounts set out in paragraphs 23 and 27 of this Ruling to constitute allowable deductions the Grower's afforestation activities as a participant in the Agriwealth 2008 Softwood Project must amount to the carrying on of a business of primary production. 83. Two Taxation Rulings are relevant in determining whether a Grower will be carrying on a business of primary production. 84. The general indicators used by the Courts are set out in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? 85. Taxation Ruling TR 2000/8 Income tax: investment schemes, particularly paragraph 89, is more specific to arrangements such as the Agriwealth 2008 Softwood Project. As Taxation Ruling TR 2000/8 sets out, the relevant principles have been established in court decisions such as Commissioner of Taxation v. Lau (1984) 6 FCR 202; 84 ATC 4929; (1984) 16 ATR 55. 86. Having applied these principles to the arrangement set out above, a Grower in the Agriwealth 2008 Softwood Project is accepted to be carrying on a business of growing and harvesting Radiata Pine for sale. | Section 8-1: 87. The Management Fees for Initial Establishment Services and Planting Services and interest on loans with United are deductible under section 8-1 (see paragraphs 43 and 44 of TR 2000/8). A 'non-income producing' purpose (see paragraphs 47 and 48 of TR 2000/8) is not identifiable in the arrangement and there is no capital component evident in the Management Fees for Initial Establishment Services and Planting Services (see paragraphs 49 to 51 of TR 2000/8). 88. The tests of deductibility under the first limb of section 8-1 are met. The exclusions do not apply. Subject to the prepayment provisions (see paragraphs 91 to 101 of this Ruling) a deduction for these amounts can be claimed in the year in which they are incurred. (Note: the meaning of incurred is explained in Taxation Ruling TR 97/7.) 89. Some Growers may finance their participation in the Project through a Loan Agreement with United. Applying the same principles as that used for the Management Fees for Initial Establishment Services and Planting Services, interest incurred under such a loan has sufficient connection with the gaining of assessable income to be deductible under section 8-1. 90. Other than where the prepayment provisions apply (see paragraphs 91 to 95 of this Ruling), a Grower can claim a deduction for such interest in the year in which it is incurred. | Sections 82KZL, 82KZME, 82KZMF and 82KZMG: 91. The prepayment provisions contained in Subdivision H of Division 3 of Part III of the ITAA 1936 affect the timing of deductions for certain prepaid expenditure. These provisions apply to certain expenditure incurred under an agreement in return for the doing of a thing under the agreement (for example, the performance of management services or the leasing of land) that will not be wholly done within the same year of income as the year in which the expenditure is incurred. If expenditure is incurred to cover the provision of services to be provided within the same income year, then it is not expenditure to which the prepayment rules apply. 92. For this Project, the only prepayment provisions that are relevant are section 82KZL of the ITAA 1936 (an interpretive provision) and section 82KZMG of the ITAA 1936 (an operative provision). References to sections 82KZME and 82KZMF of the ITAA 1936 are made only in respect of their interaction with section 82KZMG of the ITAA 1936 and to confirm that these provisions have no application to expenditure incurred by Growers who participate in the scheme set out in this Ruling. | Sections 82KZME and 82KZMF: 93. Other than the Management Fees for Initial Establishment Services and Planting Services (see below), the fees payable under the scheme to which this Product Ruling applies are payable only out of harvest proceeds and the interest payable to United is incurred monthly in arrears. Accordingly, the prepayment provisions in sections 82KZME and 82KZMF of the ITAA 1936 have no application. 94. However, sections 82KZME and 82KZMF of the ITAA 1936 may have relevance if a Grower in this Project chooses or is required to prepay interest under a loan agreement (including loan agreements with lenders other than United). 95. As stated in Note (iv) of paragraph 27 of this Ruling, prepayments of interest are not covered by this Product Ruling and Growers who make such prepayments may instead request a private ruling on the tax consequences of the prepaid interest. | Section 82KZMG: 96. Expenditure that meets the requirements of section 82KZMG of the ITAA 1936 is excluded from the application of the prepayment rules in sections 82KZME and 82KZMF of the ITAA 1936 that would otherwise apply. 97. Section 82KZMG provides a '12 month rule' that, in effect, facilitates an immediate deduction for certain prepaid expenditure [5] incurred under an 'agreement for planting and tending trees for felling' (subsection 82KZMG(3) of the ITAA 1936). 98. The 12 month rule applies to expenditure for 'seasonally dependent agronomic activities' that will be carried out during the establishment period of a particular planting of trees (subsection 82KZMG(4) of the ITAA 1936). Seasonally dependent agronomic activities are explained in Taxation Determination TD 2003/12. 99. Whilst the establishment period itself may exceed 12 months, each seasonally dependent agronomic activity must be completed within 12 months of commencement of its eligible service period (as defined in subsection 82KZL(1) of the ITAA 1936), and by the end of the income year following the 'expenditure year' (see subsections 82KZMG(1) and (2) of the ITAA 1936). 100. Under the Forestry Management Agreement each Grower incurs a Management Fee of $10,320 per Timberlot for Initial Establishment Services in the income year ended 30 June 2008 for 'seasonally dependent agronomic activities' that will be carried out during the 'establishment period' of the Trees. 101. The expenditure for 'seasonally dependent agronomic activities' meets all other requirements of section 82KZMG of the ITAA 1936 and, therefore, other than where section 82KZMGA applies (see paragraphs 102 to 104 of this Ruling), a deduction is allowable in the income year ended 30 June 2008 for the full amount of expenditure incurred by the Grower for the fees for Initial Establishment Services. | Section 82KZMGA: 102. A Grower who is an initial participant in the Project cannot deduct an amount that meets the requirements of section 82KZMG of the ITAA 1936 if a 'CGT event' happens in relation to the Grower's interest within 4 years of 30 June 2008 (subsection 82KZMGA(1) of the ITAA 1936). In this Project, only the fees for the Initial Establishment Services meet the requirements of section 82KZMG of the ITAA 1936. Accordingly, the deduction of $10,320 per 'interest' for the Management Fee for Initial Establishment Services will not be allowable if a 'CGT event' happens to the Grower's interest within the 4 year period. 103. Where subsection 82KZMGA(1) of the ITAA 1936 applies, the Commissioner may amend any affected Grower's assessment within 2 years after the end of the income year in which the 'CGT event' happens. The Commissioner's power to amend in these circumstances applies despite section 170 of the ITAA 1936 (subsection 82KZMGA(2) of the ITAA 1936) 104. A Grower whose deduction for the Management Fee for the Initial Establishment Services is disallowed because of section 82KZMGA is still required to include in their assessable income either the market value of the interest at the time of the 'CGT event', or the decrease in the market value of the interest as a result of the 'CGT event' (section 82KZMGB of the ITAA 1936). | Sections 6-10, 10-5 and 118-20 of the ITAA 1997 and section 82KZMGB of the ITAA 1936: 105. Section 6-10 includes in assessable income amounts that do not constitute ordinary income. These amounts, called statutory income, are listed in the table in section 10-5 and include amounts that are included in the assessable income of a Grower by section 82KZMGB of the ITAA 1936. | Section 82KZMGB: 106. Where a 'CGT event' (other than for a 'CGT event' in respect of a thinning) [6] happens to an interest held by a Grower who is an initial participant in this Project, section 82KZMGB includes an amount in the assessable income of the Grower if: | Market value rule applies to 'CGT events': 107. If, as a result of the 'CGT event' the Grower either: then the market value of the interest at the time of the event, or the decrease in market value of the interest as a result of the event, is included in the assessable income of the Grower (subsection 82KZMGB(2) of the ITAA 1936). A market value rule applies rather than the amount of money actually received from the CGT event (subsection 82KZMGB(3) of the ITAA 1936). However, the market value and the actual amount of money received may be the same. 108. The market value amount included in the assessable income of a Grower is the value of the interest just before the 'CGT event', or where the Grower continues to hold their interest after the 'CGT event', the amount by which the market value of the interest is reduced by the 'CGT event' (subsection 82KZMGB(2) of the ITAA 1936). 109. This provision will apply where the interest is sold, is extinguished, or ceases, and will include 'CGT events' such as a full or partial sale of the interest or from a full or partial clear-fell harvest of the trees grown under the Project. | Section 118-20: 110. Generally, where as a result of a 'CGT event' a capital gain would otherwise be included in a taxpayer's assessable income, section 118-20 will apply to reduce the capital gain if, because of the event, a provision of the income tax law other than the CGT provisions includes an amount in the taxpayer's assessable income. 111. In the case of interests held by Growers who are initial participants in this Project the market value, or the reduction in the market value of the interest from a CGT event is included in assessable income by section 6-10 of the ITAA 1997 and section 82KZMGB of the ITAA 1936. Therefore, section 118-20 of the ITAA 1997 will operate to reduce to nil any capital gain that would otherwise be assessable under the CGT provisions in Part 3-1 of the ITAA 1997. | Section 6-5: 112. Section 82KZMGB of the ITAA 1936 specifically excludes from its operation a 'CGT event' that happens in respect of a thinning (see paragraph 82KZMGB(1)(d) of the ITAA 1936). 113. Thinning amounts received by a Grower who is an initial participant in this Project do not arise as a result of a 'CGT event' and are not otherwise assessable under section 82KZMGB of the ITAA 1936. The receipt of an amount arising from a thinning of the Project trees is a distribution that arises as an incident of the Grower holding an interest in the Project. It is an item of ordinary income and is assessable under section 6-5 in the year in which it is derived. | Section 25-25: 114. A deduction is allowable for expenditure incurred by a Grower in borrowing money to the extent that the borrowed money is used for the purpose of producing assessable income (subsection 25-25(1)). 115. In this Project the loan application fee payable to United is incurred to borrow money that is used or is to be used solely for income producing purposes during each income year over the term of the loan. 116. The deduction for the borrowing expense is spread over the period of the loan or 5 years, whichever is the shorter (subsection 25-25(4)). | Sections 35-10 and 35-55 - deferral of losses from non-commercial business activities and the Commissioner's discretion: 117. In deciding to exercise the discretion in paragraph 35-55(1)(b) on a conditional basis for 30 June 2008 to 30 June 2036, 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, the Commissioner has determined that for those income years: 118. A Grower who would otherwise be required to defer a loss arising from their participation in the Project under subsection 35-10(2) until a later income year is able to offset that loss against their other assessable income. 119. The exercise of the Commissioner's discretion under paragraph 35-55(1)(b) 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. | Section 82KL - recouped expenditure: 120. The operation of section 82KL of the ITAA 1936 depends, among other things, on the identification of a certain quantum of 'additional benefits(s)'. Insufficient 'additional benefits' will be provided to trigger the application of section 82KL of the ITAA 1936. It will not apply to deny the deduction otherwise allowable under section 8-1 of the ITAA 1997. | Part IVA - general tax avoidance provisions: 121. For Part IVA of the ITAA 1936 to apply there must be a 'scheme' (section 177A), a 'tax benefit' (section 177C) and a dominant purpose of entering into the scheme to obtain a tax benefit (section 177D). 122. The Agriwealth 2008 Softwood Project will be a 'scheme'. A Grower will obtain a 'tax benefit' from entering into the scheme, in the form of tax deductions for the amounts detailed at paragraph 23 and 27 of this Ruling that would not have been obtained but for the scheme. However, it is not possible to conclude the scheme will be entered into or carried out with the dominant purpose of obtaining this tax benefit. 123. Growers to whom this Ruling applies intend to stay in the scheme for its full term and derive assessable income from the harvesting and sale of the timber. There are no facts that would suggest that Growers have the opportunity of obtaining a tax advantage other than the tax advantages identified in this Ruling. There is no non-recourse financing or round robin characteristics, and no indication that the parties are not dealing at arm's length or, if any parties are not dealing at arm's length, that any adverse tax consequences result. Further, having regard to the factors to be considered under paragraph 177D(b) of the ITAA 1936 it cannot be concluded, on the information available, that participants will enter into the scheme for the dominant purpose of obtaining a tax benefit.


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. | $10,320 See Notes (i) & (ii) | Management Fee for Planting Services | $880 See Notes (i) and (iii) | Interest on loans with United Pacific Finance Pty Limited | As incurred See Note (iv) | Must be calculated See Note (v) | Tumut/Tumbarumba and Oberon regions of NSW. | Type of business to be carried on by each Grower | Commercial growing and cultivation of Pinus radiata trees for the purpose of harvesting and selling timber. | Approximately 28 years with an option to extend up to 3 years | Number of hectares offered for cultivation | Number of Trees per Timberlot | Minimum allocation per Grower | No minimum subscription applies | Fee for Planting Services, Interim and Final Management Fees, Rental Fee, Tree Insurance, cost of harvesting and transporting timber and land rehabilitation. | Minimum Trust Unit allocation per Unit Holder | Deductions for the Management Fee for Initial Establishment Services | 'CGT event' within 4 years for Growers who are 'initial participants' | Deductions for Management Fee for Planting Services, loan interest and loan application fees | Assessable income from 'CGT events' for Growers who are initial participants | Amounts received by Growers where the Project trees are thinned | Division 35 - deferral of losses from non-commercial business activities | Prepayment provisions and anti-avoidance provisions | Deductibility of the Management Fees for Initial Establishment Services and Planting Services and loan interest | Application of the prepayment provisions to this Project | Amounts received by initial participants where the Project trees are thinned | Appendix 2 - Detailed contents list


Related rulings: TR 97/7 TR 97/11 TR 98/22 TR 2000/8 TR 2007/6 TD 2003/12
Legislative references: ITAA 1936 82KL ITAA 1936 Pt III Div 3 Subdiv H ITAA 1936 82KZL ITAA 1936 82KZL(1) ITAA 1936 82KZME ITAA 1936 82KZMF ITAA 1936 82KZMG ITAA 1936 82KZMG(1) ITAA 1936 82KZMG(2) ITAA 1936 82KZMG(3) ITAA 1936 82KZMG(4) ITAA 1936 82KZMGA ITAA 1936 82KZMGA(1) ITAA 1936 82KZMGA(2) ITAA 1936 82KZMGB ITAA 1936 82KZMGB(1)(d) ITAA 1936 82KZMGB(2) ITAA 1936 82KZMGB(3) ITAA 1936 Pt III Div 6 ITAA 1936 Pt IVA ITAA 1936 170 ITAA 1936 177A ITAA 1936 177C ITAA 1936 177D ITAA 1936 177D(b) ITAA 1997 6-5 ITAA 1997 6-10 ITAA 1997 8-1 ITAA 1997 10-5 ITAA 1997 17-5 ITAA 1997 25-25 ITAA 1997 25-25(1) ITAA 1997 25-25(4) 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 Pt 3-1 ITAA 1997 104-70 ITAA 1997 108-5 ITAA 1997 110-25(2) ITAA 1997 118-20 ITAA 1997 328-110 ITAA 1997 995-1 SISA 1993 TAA 1953 TAA 1953 Sch 1 357-75(1) Copyright Act 1968 Corporations Act 2001 761G Conveyancing Act 1919 (NSW) 87A
Case references: Commissioner of Taxation v. Lau (1984) 6 FCR 202 84 ATC 4929 (1984) 16 ATR 55
Subject references: advance deductions and expenses for certain forestry expenses carrying on a business commencement of a business fee expenses forestry agreement interest expenses management fees non-commercial losses producing assessable income product rulings public rulings seasonally dependent agronomic activities tax avoidance tax benefits under tax avoidance schemes tax shelters tax shelters project taxation administration