• D14 Forestry managed investment scheme deduction 2015

    Did you make payments to a forestry managed investment scheme (FMIS)?

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    No

     

    Yes

    You may be able to claim a deduction. Read on.

    You may be able to claim a deduction at this item for payments made to an FMIS if you:

    • currently hold a forestry interest in an FMIS, or held a forestry interest in an FMIS during the income year, and
    • have paid an amount to a forestry manager of an FMIS under a formal agreement.

    You can only claim a deduction at this item if the forestry manager has advised you that the FMIS satisfies the 70% direct forestry expenditure rule in Division 394 of the Income Tax Assessment Act 1997.

    If you are an initial participant, you cannot claim a deduction if you disposed of your forestry interest in an FMIS within four years after the end of the income year in which you first made a payment.

    However, the deduction will be allowed if the disposal occurred because of circumstances outside your control, provided you could not have reasonably foreseen the disposal happening when you acquired the interest. Disposals that would generally be outside your control include compulsory acquisition, insolvency of you or the scheme manager, or cancellation of the interest due to fire, flood or drought.

    For more information, see Forestry managed investment schemes.

    Danger

    If you are a subsequent participant, you cannot claim a deduction for the amount paid for acquiring your interest. You can only claim a deduction for your ongoing payments.

    End of danger

    You need to know

    You are an initial participant in an FMIS if:

    • you obtained your forestry interest in the FMIS from the forestry manager of the scheme, and
    • your payment to obtain the forestry interest results in the establishment of trees.

    You are a subsequent participant if you are not an initial participant.

    A forestry manager of an FMIS is the entity that manages, arranges or promotes the FMIS.

    A forestry interest in an FMIS is a right to benefits produced by the scheme (whether the right is actual, prospective or contingent and whether it is enforceable or not).

    Participant payments under an FMIS

    Initial participant

    You can claim at this item initial and ongoing payments made under an FMIS that you have made as an initial participant of the FMIS.

    Subsequent participant

    You can claim at this item ongoing payments made under an FMIS that you have made as a subsequent participant of the FMIS.

    Excluded payments

    You cannot claim a deduction at this item for any of the following payments:

    • payments for borrowing money
    • interest and payments in the nature of interest (such as a premium on repayment or redemption of a security, or a discount of a bill or bond)
    • payments of stamp duty
    • payments of goods and services tax (GST)
    • payments that relate to transportation and handling of felled trees after the earliest of the following
      • sale of the trees
      • arrival of the trees at the mill door
      • arrival of the trees at the port
      • arrival of the trees at the place of processing (other than where processing happens in-field)
       
    • payments that relate to processing
    • payments that relate to stockpiling (other than in-field stockpiling).

    Completing this item

    Work out the total amount of your deductible:

    • initial and ongoing payments made under an FMIS, if you are an initial participant, or
    • ongoing payments made under an FMIS, if you are a subsequent participant.

    Write the amount at F item D14 on your tax return.

    Where to go next

      Last modified: 29 May 2015QC 44164