• X Forestry managed investment scheme income

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    Show at X the total income from all the following activities in the forestry interests that the fund holds in its FMISs. The amount you show at X will depend on the points below.

    Harvests and sales are CGT events because these events result in the fund no longer holding some or all of its forestry interest.

    Definitions

    The fund is an initial participant in an FMIS if:

    • the fund obtained its forestry interest in the FMIS from the forestry manager of the scheme, and
    • the fund's payment to obtain the forestry interest in the FMIS results in the establishment of trees.

    The fund is a subsequent participant if it is not an initial participant.

    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 the benefits produced by the FMIS (whether the right is actual, prospective or contingent and whether it is enforceable or not).

    The amount of the fund's total forestry scheme deductions is the total of all the amounts that it can deduct or has deducted for each income year that it held its forestry interest. See U Forestry managed investment scheme deduction item 11 for more information on amounts that you can deduct.

    The amount of the fund's incidental forestry scheme receipts is the total of all the amounts that it received from the FMIS in each income year that it held its forestry interest, other than amounts received because of a CGT event, that is, a sale or a harvest.

    For an initial participant in an FMIS

    Thinning receipts

    If the fund received thinning proceeds from its forestry interest, include at X the actual amount received.

    Sale and harvest receipts - forestry interest no longer held

    If the fund ceased holding its forestry interest as a result of a CGT event (because it sold its interest or it received harvest proceeds), include at X the market value of the forestry interest at the time of the CGT event

    Sale and harvest receipts - forestry interest still held

    If a CGT event happened and the fund still held its forestry interest (because it sold part of its interest or there was a partial harvest), include at X the amount by which the market value of the forestry interest was reduced.

    For a subsequent participant in an FMIS

    Thinning receipts

    If the fund received thinning proceeds from its forestry interest, include at X the actual amount received.

    Sale and harvest receipts - forestry interest no longer held

    If the fund ceased holding its forestry interest as a result of a CGT event (because it sold its interest or it received harvest proceeds), include at X the lesser of the following two amounts:

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

    Sale and harvest receipts - forestry interest still held

    If a CGT event happened and the fund still held its forestry interest (because it sold part of its interest or there was a partial harvest), work out the following two amounts:

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

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

    amount worked out above

     

    The decrease (if any) in the market value of the forestry interest (as a result of the CGT event)
    the market value of the forestry interest just before the CGT event

    Include at X the amount calculated using the formula.

    To complete this item

    Add up all the amounts you worked out for the fund's FMIS income and write the total at X.

    See examples 1 and 2 for how to calculate the amount you show at X.

    For more information on the CGT treatment of the fund's forestry interest, see Guide to capital gains tax 2009.

    Example 1

    Cedar Superannuation Fund is a subsequent participant in an FMIS. It sold its forestry interest at the market value of $20,000. The sale of the forestry interest is a CGT event. The original cost base was $14,000.

    In the time that the fund held the forestry interest, it claimed $4,000 in deductions (its total forestry scheme deductions) for lease fees, annual management fees and the cost of felling that it paid to the forestry manager.

    In the same period, it received $1,500 from thinning proceeds (its incidental forestry scheme receipts).

    Cedar Superannuation Fund will need to include $2,500 (that is, $4,000 - $1,500) at X, because this amount is less than the market value of its forestry interest at the time of the CGT event.

    Example 2

    Oakey Superannuation Fund is a subsequent participant in an FMIS. It received harvest proceeds over two income years. It received the first harvest payment of $5,000 in the 2008-09 income year.

    The market value of its forestry interest was $20,000 just before it received its payment for the first harvest (which is a CGT event). After it received this first harvest payment, the market value of its forestry interest was reduced to $15,000. Its original cost base was $14,000.

    In the time that it held its interest, Oakey Superannuation Fund claimed $4,000 in deductions (its total forestry scheme deductions) for lease fees, annual management fees and the cost of felling that it has paid to the forestry manager. In the same period, it received $1,500 from thinning proceeds (its incidental forestry scheme receipts).

    Step 1

    The market value of the forestry interest (at the time of the CGT event) was $20,000.

    The amount by which the total forestry scheme deductions exceed the incidental forestry scheme receipts was $2,500 (that is, $4,000 minus $1,500).

    The amount used in step 2 was $2,500.

     

    Step 2

    Using the formula above:

     
       

    $2,500

    x

    $5,000
    $20,000

    =

    $625

     

    Step 3

    The fund included $625 at X on its 2009 tax return.

     

    Step 4

    In the 2009-10 income year, the fund received $15,000 in payment for the final harvest (which is a CGT event). It has not paid any other fees in the 2009-10 income year.

    Oakey Superannuation Fund will need to include the remainder from step 2 of $1,875 (that is, $2,500 minus $625) at X on its 2010 tax return.

    Direction icon

    For more information on the CGT treatment of your forestry interest, see the Guide to capital gains tax 2009.

    Last modified: 25 Nov 2009QC 21714