10 Forestry managed investment scheme income

Definitions relating to forestry managed investment scheme

A partnership is an initial participant in a forestry managed investment scheme (FMIS) if both:

• it gets its forestry interest in the FMIS from the forestry manager of the scheme
• its payment to get the forestry interest in an FMIS results in the establishment of trees.

A partnership is a subsequent participant if it gets an interest in an FMIS through secondary market trading. This means it acquires its interest other than as an initial participant, usually by purchasing that interest from an initial participant in the scheme.

The 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 FMIS, whether the right is actual, prospective or contingent, and whether it is enforceable or not.

The amount of the partnership’s total forestry scheme deductions is the total of all the amounts it can deduct or has deducted for each income year it held its forestry interest. For more information on amounts you can deduct, see item 17 Forestry managed investment scheme deduction.

The amount of the partnership’s incidental forestry scheme receipts is the total of all the amounts it receives from the FMIS in each income year it held its forestry interest, other than amounts it receives because of a CGT event. Write at item 10 – label Q the total income from the following activities for each FMIS in which the partnership holds a forestry interest.

For information on the CGT treatment of the partnership’s forestry interests, see Guide to capital gains tax 2025.

If the partnership is a member of a collapsed agribusiness managed investment scheme, for information on calculating your income and deductions, see Collapse and restructure of agribusiness managed investment schemes – participant information.

Participants in an FMIS – for an initial participant

As an initial participant in FMIS, consider:

• Thinning receipts
• Sale and harvest receipts – forestry interest no longer held
• Sale and harvest receipts – forestry interest still held

Thinning receipts

If the partnership receives thinning proceeds from its forestry interest, include the actual amount it receives at label Q.

Sale and harvest receipts – forestry interest no longer held

Include the market value of the forestry interest at the time of the CGT event at label Q if both of the following apply:

• a CGT event happens and the partnership ceases holding its forestry interest (because it sold its interest or it receives harvest proceeds)
• the partnership claims a deduction, can claim a deduction, or would be entitled to deduct such amounts, but for a CGT event happening within 4 years after the end of the income year in which the partnership first pays an amount under the FMIS.

Sale and harvest receipts – forestry interest still held

Include the amount by which you reduce the market value of the forestry interest at label Q if both of the following apply:

• a CGT event happens and the partnership still held its forestry interest (because it sold part of its interest or there was a partial harvest)
• the partnership has claimed a deduction, can claim a deduction, or would be entitled to deduct such amounts, but for a CGT event happening within 4 years after the end of the income year in which the partnership first pays an amount under the FMIS.

Participants in an FMIS – for a subsequent participant

As a subsequent participant in FMIS, consider:

• Thinning receipts
• Sale and harvest receipts – forestry interest no longer held
• Sale and harvest receipts – forestry interest still held

Thinning receipts

If the partnership receives thinning proceeds from its forestry interest, include the actual amount it receives at label Q.

Sale and harvest receipts – forestry interest no longer held

Include the amount you work out below in the total amount at label Q, if both of the following apply:

• a CGT event happens and the partnership ceases holding its forestry interest as a result of a CGT event (because it sold its interest or it receives harvest proceeds)
• the partnership deducts, or can deduct or could claim a deduction amount, if it pays the amount under the FMIS.

Work out in relation to the forestry interest the lesser of either the following 2 amounts:

• market value of the forestry interest at the time of the CGT event
• amount (if any) by which the total forestry scheme deductions exceed the incidental forestry scheme receipts.

Sale and harvest receipts – forestry interest still held

Include the amount you work out below in the total amount at label Q, if both of the following apply:

• a CGT event happens and the partnership still held its forestry interest (because it sold part of its interest or there was a partial harvest)
• the partnership deducts, can deduct or could claim a deduction amount it pays the amount under the FMIS.

Work out the lesser of the following 2 amounts, in relation to the forestry interest:

• the market value of the forestry interest at the time of the CGT event
• the amount (if any) by which the total forestry scheme deductions exceed the incidental forestry scheme receipts ('net deductions').

Use the lesser of the 2 amounts above in the following formula:

Lesser of 2 amounts above multiplied by (the decrease (if any) in the market value of the forestry interest (as a result of the CGT event) divided by the market value of the forestry interest just before the CGT event)

Include at label Q the amount you calculate using the above formula.

In a future income year (a year in which the partnership receives further proceeds from a harvest or the sale of its forestry interest), disregard the amount of the 'net deductions' that have already been shown at label Q.

 

Continue to: 11 Gross interest

Return to: Instructions to complete the Partnership tax return 2025