Document ID: chunk:federal_register_of_legislation:C2010C00404:clause:8_12
Version: federal_register_of_legislation:C2010C00404
Segment Type: clause
Provision Reference: sch 8 cl 12
Character Range: 38713–40400

12  Subsections 40‑1005(1), (2), (3) and (4)
Repeal the subsections, substitute:

 (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 years and 105 days after that day; and
 (b) on which you use the land occupied by the trees for the primary and principal purpose of *carbon sequestration by the trees; and
 (c) on which you satisfy a condition in subsection (5) for the trees.

write‑off rate is 7%.

 (3) You cannot deduct more in total than the amount of capital expenditure incurred for establishing the trees up to the time at which they are established.