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  • U1 and U2 Forestry managed investment scheme expense

    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

    Did the SMSF incur expenses for a forestry managed investment scheme (FMIS)?

    No

    Leave U1 and U2 blank. Go to L1 and L2.

    Yes

    Read on.

    Write at U1 and U2, as required, the amount of forestry managed investment scheme expenses that the SMSF incurred in 2018–19.

    U1 Deductible forestry managed investment scheme expenses

    Write at U1 the total amount of deductible payments made under an FMIS.

    Do not include at U1 payments (or any part of such payments) that relate to earning:

    You can read more about calculating deductible FMIS payments at Appendix 2: Forestry managed investment schemes.

    If the SMSF pays retirement phase superannuation income stream benefits to a member, refer to How expenses are treated when a SMSF has ECPI before you claim a deduction for the SMSF's FMIS expenses.

    U2 Non-deductible forestry managed investment scheme expenses

    Write at U2 the total amount of payments made under an FMIS that are not deductible The SMSF cannot claim a deduction for certain excluded payments. For more information see Appendix 2: Forestry managed investment schemes.

    The SMSF cannot claim a deduction for payments if the income from the FMIS is exempt income, such as exempt current pension income.

    For information on the SMSF's eligibility to claim deductions, if the SMSF incurred expenses to do with a collapsed agribusiness managed investment scheme, then see Collapse and restructure of agribusiness managed investment schemes – participant information.

    Example 'SMSF with no ECPI': FMIS expenses

    SMSF U has no exempt current pension income, foreign income or non-arm's-length income.

    SMSF U is entitled to a deduction of $800 for payments made to an FMIS in 2018–19.

    SMSF U reports:

    I1 Deductible forestry managed investment scheme expenses $800

    I2 Non-deductible forestry managed investment scheme expenses (Blank)

    End of example

     

    Example 'SMSF with ECPI': FMIS expenses

    SMSF UU pays retirement phase superannuation income stream benefits to one of its three members and some of its income is exempt from income tax under the exempt current pension income rules.

    SMSF UU made payments of $800 to an FMIS in 2018–19.

    Using the rules described at How expenses are treated when a SMSF has ECPI SMSF UU determines that $200 of the payments relate to earning its ECPI.

    SMSF UU reports:

    I1 Deductible forestry managed investment scheme expenses $600

    I2 Non-deductible forestry managed investment scheme expenses $200

    End of example
    Last modified: 03 Oct 2019QC 58668