Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p23
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 23/24)
Character Range: 1083814–1086582

included); or
 (b) to the extent that, for another entity, the amount is a *return on or of:
 (i) an *equity interest; or
 (ii) a *debt interest that is an obligation of yours.

40‑885  Non‑arm's length transactions
  If you incurred capital expenditure, or received an amount, under an *arrangement and:
 (a) there is at least one other party to the arrangement with whom you did not deal at *arm's length; and
 (b) apart from this section:
 (i) the amount of the expenditure would be more than the *market value of what it was for; or
 (ii) the amount you received would be less than the market value of what it was for;
the amount of expenditure, or the amount received, you take into account under this Subdivision is that market value.

Subdivision 40‑J—Capital expenditure for the establishment of trees in carbon sink forests

Guide to Subdivision 40‑J

40‑1000  What this Subdivision is about
      You can deduct amounts for capital expenditure incurred for establishing trees that meet the requirements for constituting a carbon sink forest.

Table of sections

Operative provisions
40‑1005 Deduction for expenditure for establishing trees in carbon sink forests
40‑1010 Expenditure for establishing trees in carbon sink forests
40‑1015 Carbon sequestration by trees
40‑1020 Certain expenditure disregarded
40‑1025 Non‑arm's length transactions
40‑1030 Extra deduction for destruction of trees in carbon sink forest
40‑1035 Getting information if you acquire a carbon sink forest

Operative provisions

40‑1005  Deduction for expenditure for establishing trees in carbon sink forests
 (1) You can deduct an amount for an income year if:
 (a) you or another entity incurred capital expenditure that is covered under section 40‑1010 in relation to particular trees; and
 (b) you satisfy a condition in subsection (5) for the trees for at least part of the income year; and
 (c) you are carrying on a *business in the income year; and
 (d) you use the land occupied by the trees for the primary and principal purpose of *carbon sequestration by the trees (see section 40‑1015); and
 (e) your purposes in using the land occupied by the trees do not include any of the following:
 (i) felling the trees;
 (ii) using the trees for *commercial horticulture; and
 (f) you do not use the land in connection with:
 (i) a *managed investment scheme; or
 (ii) a *forestry managed investment scheme.
 (2) The amount of the deduction is worked out under this formula:

where:
establishment expenditure is the amount of expenditure mentioned in subsection (1).
write‑off days in income year is the number of days in the income year:
 (a) that occur within the period:
 (i) starting on the first day of the income year in which the trees are established; and
 (ii) ending 14