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  • U Forestry managed investment scheme deduction

    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

    The fund may be able to claim a deduction at U for payments made to an FMIS if:

    • the fund currently holds a forestry interest in an FMIS, or held a forestry interest in an FMIS during the 2007-08, and
    • the fund paid an amount to a forestry manager of an FMIS under a formal agreement.

    The fund can claim a deduction at U only 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 the fund is an initial participant, it cannot claim a deduction if it disposed of the forestry interest in an FMIS within four years after the end of the income year in which a payment was first made.

    If the fund is a subsequent participant, it cannot claim a deduction for the amount paid for acquiring the interest. The fund can only claim a deduction for ongoing payments.

    The fund is an initial participant in an FMIS if:

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

    The fund is a subsequent participant if it is 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 the benefits produced by the scheme (whether the right is actual, prospective or contingent, and whether it is enforceable or not).

    Initial participants can claim at U initial and ongoing payments made under an FMIS that were made as an initial participant of the FMIS.

    Subsequent participants can claim at U ongoing payments made under an FMIS that were made as a subsequent participant of the FMIS.

    Excluded payments

    The fund cannot claim a deduction at U 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 GST
    • payments that relate to the 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, or
      • arrival of the trees at the place of processing (other than where processing happens in-field)
       
    • payments that relate to processing, and
    • payments that relate to stockpiling (other than in-field stockpiling).

    Show at U the total amount of deductible payments made to an FMIS.

    Last modified: 25 Nov 2009QC 21714