Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p44
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 44/95)
Character Range: 5660026–5662778

carried on, you are:
 (i) carrying on a primary production business covered by paragraph (d); or
 (ii) a beneficiary of a trust that is carrying on a primary production business covered by paragraph (d); or
 (iii) a partner in a partnership that is carrying on a primary production business covered by paragraph (d).
Note 1: If you cease to hold the registered emissions unit, the unit is not a primary producer registered emissions unit for any new holder of the unit (see paragraph (c)).
Note 2: A consequence of paragraph (c) is that the unit will not be a primary producer registered emissions unit for you for a subsequent holding of it. That is, if after disposing of the unit you later reacquire it.
Note 3: Different subparagraphs of paragraph (e) may apply to you at different times.

Subdivision 420‑B—Acquiring registered emissions units

Table of sections
420‑15 What you can deduct
420‑20 Non‑arm's length transactions and transactions with associates
420‑21 Incoming international transfers of emissions units
420‑22 Becoming taxable in Australia on the proceeds of sale of registered emissions units

420‑15  What you can deduct
 (1) You can deduct expenditure to the extent that you incur it in becoming the *holder of a *registered emissions unit.

Timing
 (2) You deduct the expenditure in the income year in which you start to *hold the *registered emissions unit.

Australian carbon credit units
 (4) You cannot deduct under this section expenditure you incur in becoming the *holder of an *Australian carbon credit unit issued to you in accordance with the Carbon Credits (Carbon Farming Initiative) Act 2011 unless you incur the expenditure in preparing or lodging:
 (a) an application for a certificate of entitlement (within the meaning of that Act); or
 (b) an offsets report (within the meaning of that Act).

No deduction if sale proceeds would not be assessable
 (5) You cannot deduct under this section expenditure you incur in becoming the *holder of a *registered emissions unit if, assuming that you had sold the unit to someone else immediately after you started to *hold the unit, the proceeds of the sale would not have been included in your assessable income under section 420‑25.
Note: Under the International Tax Agreements Act 1953, for some foreign residents, the proceeds of the sale of a registered emissions unit are not assessable income in Australia.

420‑20  Non‑arm's length transactions and transactions with associates
 (1) If:
 (a) an entity becomes the *holder of a *registered emissions unit; and
 (b) either:
 (i) the entity and the previous holder of the unit did not deal with each other at *arm's length; or
 (ii) the previous holder is the entity's *associate; and
 (c) the entity did not pay or