Product Ruling

PR 2000/59A - Addendum

Income tax: Beechworth Winegrape Project

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  View the consolidated version for this notice.

FOI status:

May be released

Notice of Addendum

At paragraph 15:

Delete:

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Facsimile transmission dated 13 April 2000 from Lear & Co to the Australian Taxation Office.

and replace with:

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Facsimile transmission dated 13 April 2000 from Lear & Co to the Australian Taxation Office and letters and attachments from BVLM dated 7 December 2000 and 19 April 2001.

Add to the Ruling part of the Product Ruling:

Division 35 - deferral of losses from non-commercial business activities

Section 35-55 - Commissioner's discretion

40.1. For a Farmer who is an individual and who entered the Project on or after 17 May 2000 and prior to any withdrawal of this Product Ruling, the rule in section 35-10 may apply to the business activity comprised by their involvement in this Project. Under paragraph 35-55(1)(b) the Commissioner has decided for the income years ended 30 June 2001 to 30 June 2005 that the rule in section 35-10 does not apply to this business activity provided that the Project has been, and continues to be, carried on in a manner that is not materially different to the arrangement described in this Ruling.

40.2. This exercise of the discretion in subsection 35-55(1) will not be required where for any year in question:

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a Farmer's business activity satisfies one of the objective tests in sections 35-30, 35-35, 35-40 or 35-45; or

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the 'Exception' in subsection 35-10(4) applies.

40.3. Where either the Farmer's business activity satisfies one of the objective tests, the discretion in subsection 35-55(1) is exercised, or the Exception in subsection 35-10(4) applies, section 35-10 will not apply. This means that a Farmer will not be required to defer any excess of deductions attributable to their business activity in excess of any assessable income from that activity, i.e., any 'loss' from that activity, to a later year. Instead, this 'loss' can be offset against other assessable income for the year in which it arises.

40.4. Farmers are reminded of the important statement made on Page 1 of this Product Ruling. Therefore, Farmers should not see the Commissioner's decision to exercise the discretion in paragraph 35-55(1)(b) as an indication that the Tax Office sanctions or guarantees the Project or the product to be a commercially viable investment. An assessment of the Project or the product from such a perspective has not been made.

Commissioner of Taxation
13 June 2001

References

ATO references:
NO T2000/13746