From time to time we write to all promoters of managed investment schemes (MIS) to provide information about Tax Office activity in this sector and developments within the industry.
A summary of our most recent letters is outlined below.
On 14 May 2009 we wrote to clarify our product ruling lodgment policy for Division 394 and agribusiness schemes, specifically the earliest date a product ruling application will be accepted.
On 23 December 2008, we advised of the outcome of the decision of the Federal Court in Hannebery & Hance v Commissioner of Taxation (the test case) and the processing of product ruling applications for the 2008–09 year. The test case concerned the Tax Office's reconsidered view of the income tax treatment of investments in agribusiness MIS.
On 9 October 2008 we reminded applicants of our offer made on 2 May 2008 to accept applications before the test case decision.
In August 2008 we sent two letters. Firstly, on 1 August 2008, we provided an update about the GST treatment of registered agricultural managed investment schemes (MIS) under the new Division 394 regime.
Secondly, on 15 August 2008, we reminded product ruling applicants of their obligations when applying for a product ruling and in particular, that we would firmly apply Product Ruling PR 2007/71 The product rulings system in regard to incomplete applications.
In May 2008, we sent out two letters on matters relating to our reconsidered view of the income tax treatment of investments in agribusiness managed investment schemes (MIS) from 2008–09 and the test case to be heard by the Full Federal Court in August 2008.
On 2 May 2008, we announced that we would accept applications for product rulings for the 2008–09 year, process them to the extent possible, but hold off on issuing them pending the decision by the Federal Court. On 14 May 2008 we confirmed that we would treat unregistered MIS in the same manner.
On 29 April 2008, we reminded promoters that each year we undertake reviews of projects that were issued with a product ruling during the previous year. Following recent activity, we advised that we have identified several issues that may cause participants to fall outside the protection offered by the product rulings. In particular, concerns arose from subscription monies not being paid in full by the date specified in the rulings and the treatment of losses in tax returns in a manner contrary to the product ruling.
On 30 October 2007, we advised that we’d finalised the draft ruling on registered agricultural managed investment schemes and had issued the final ruling on 17 October 2007 as Taxation Ruling TR 2007/8 Income tax: registered agricultural managed investment schemes.
Early in the 2007–08 income year, we sent two letters on matters relating to lodgment and processing of 2008 product ruling applications in light of the MIS test case on the reconsidered view of the income tax treatment of agribusiness managed investment schemes. These letters issued on 19 July 2007 and 21 August 2007.
Product Ruling PR 2007/71 was released on 25 July 2007. We wrote to promoters on 27 July 2007 advising that this ruling has replaced the previous ruling about the product rulings system – Product Ruling PR 1999/95 Income tax and fringe benefits tax: product rulings system.
On 20 June 2007, we wrote to promoters about the claiming of deductions by project participants using Loss Code 5 in the Business and Professional Items Schedule for Individuals. We asked that promoters forward information to their scheme participants to ensure they claimed deductions correctly.
On 19 May 2007, we wrote to advise of the Tax Office position in relation to the ongoing water shortage across much of Australia and the potential effects this may have on product rulings issued or to be issued by the Tax Office.
Last Modified: Thursday, 9 July 2009
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