INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 394 - Forestry managed investment schemes  

SECTION 394-45   Direct forestry expenditure  

394-45(1)  
Direct forestry expenditure under a *forestry managed investment scheme means:


(a) an amount paid under the scheme that is attributable to establishing, tending, felling and harvesting trees; and


(b) notional amounts reflecting the *market value of goods, services or the use of land, provided by the *forestry manager of the scheme, for establishing, tending, felling and harvesting trees. EXAMPLES

Example 1:

Notional amounts reflecting the value of the use of land owned by the forestry manager that is provided for establishing, tending, felling and harvesting trees.

Example 2:

Notional amounts reflecting the value of tree felling services provided by the forestry manager.

394-45(2)  
Treat *direct forestry expenditure covered by paragraph (1)(b) as paid annually for each income year of the *forestry manager of the scheme based on the *market value of the goods, services, or the use of the land. Treat the day on which it is paid as:


(a) unless paragraph (b) or (c) applies - 1 January in the income year; or


(b) if the first time an amount is paid under the scheme is later than the first day of the income year - the last day of the income year; or


(c) if the scheme comes to an end on a day before the end of the income year - that day. Exclusions - general

394-45(3)  
However, direct forestry expenditure under the scheme does not include amounts paid under the scheme to the extent that they relate to any of the following:


(a) marketing of the scheme;

Example:

Advertising, sales, sponsorship and entertainment.


(b) insurance, contingency funds or provisions (other than provisions for employee entitlements);


(c) financing;


(d) lobbying;


(e) general business overheads (but not overheads directly related to forestry);


(f) subscriptions to industry bodies;


(g) commissions for financial planners or financial advisers;


(h) compliance with requirements related to the structure and operations of the *forestry manager of the scheme;

Example:

Product design and preparation of product disclosure statements.


(i) supervision and auditing of contracts, other than direct supervision of direct forestry activities (such as establishing trees for felling);


(j) legal fees relating to any matter mentioned in this subsection. Exclusions - expenditure after harvest etc.

394-45(4)  
Also, direct forestry expenditure under the scheme does not include amounts paid under the scheme to the extent that they relate to any of the following:


(a) transportation and handling of felled trees that happens after the earliest of the following:


(i) sale of the trees;

(ii) arrival of the trees at the mill door;

(iii) arrival of the trees at the port;

(iv) arrival of the trees at the place of processing (other than where processing happens in-field);


(b) processing;


(c) stockpiling (other than in-field stockpiling);


(d) marketing and sale of forestry produce.


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