Show download pdf controls
  • If the responsible entity of the managed investment scheme does not intend to apply for our discretion or to extend the period

    An individual participant in an agribusiness managed investment scheme (MIS) may apply for a private ruling on the operation of the non-commercial loss rules if the responsible entity of the MIS does not intend to apply.

    Alternatively, a group of participants in the MIS may apply for a private ruling, as long as all parties agree in writing to be named as co-rulees.

    Next step:

    As an individual participant in the MIS you can apply for our discretion, or to extend the period the discretion, by lodging a completed private ruling application together with the supporting documentation set out in the evidentiary checklist.

    See also:

    Additional information required to rule

    To apply for discretion of the non-commercial loss rules for an agribusiness managed investment scheme (MIS) you need to provide information to support your application. The following are examples of the type of information that should be provided.

    Lead time

    The following documents can support that (because of the nature of the business activity) there is a lead time before profitability can be expected:

    • industry reports
    • published industry statistics
    • independent expert report on the industry.

    Objective expectation

    There must be an objective expectation that within a commercially viable period for the industry concerned, the business activity will produce a 'tax profit', or for participants that meet the income requirements, the business will pass one of the four tests:

    • assessable income test
    • profits test
    • real property test, or
    • other assets test.

    The following documents can support an objective expectation:

    • independent expert report on the MIS
    • MIS business plan
    • forecasted cash flows
    • actual cash flow
    • revised forecasted cash flows

    Special circumstances

    You can use the following documents to show that special circumstances have affected the business activity so that is has not produced a 'tax profit' or passed one of the four tests:

    • independent report on the special circumstances
    • independent report on the effect of the special circumstances on the MIS
    • published industry reports on the effect of the special circumstances
    • published climate and weather reports of the special circumstances (where applicable)

    An application based on special circumstances must also demonstrate that there is an objective expectation that the business activity will make a 'tax profit' or meet one of the tests within a commercially viable period for the industry concerned.

    Next steps:

    The responsible entity of the MIS can apply for a product ruling, including the additional information required to consider the non-commercial loss rules and determine we can exercise discretion under those rules.

    If you are a participant in an MIS and the responsible entity of the MIS does not intend to apply for discretion, you can apply for the discretion by lodging a completed private ruling application together with the supporting documentation:

    See also:

    More information

    See also:

      Last modified: 01 Aug 2017QC 16137