Product Ruling

PR 2005/31A - Addendum

Income tax: Environinvest Eucalypt Project No. 7 - Revised Arrangement

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FOI status:

may be released

Addendum

This Addendum amends Product Ruling PR 2005/31 to reflect changes to simplified tax system legislation from 2005-06 onwards.

PR 2005/31 is amended as follows:

1. Paragraph 58

Replace the paragraph with

58. To be an 'STS taxpayer' a Grower must be eligible to be an 'STS taxpayer' and must have elected to be an 'STS taxpayer'. Changes to the STS rules apply from 1 July 2005. From that date, STS taxpayers may use the accruals accounting method. For a Grower participating in the Project, the recognition of income and the timing of tax deductions where the Grower uses the cash accounting method under the STS is different.

2. Paragraph 61

Replace the paragraph with:

61. Other than Growers referred to in paragraph 62, a Grower is assessable on ordinary income from carrying on their business of afforestation in the income year in which that income is derived.

3. Paragraph 62

Replace the paragraph with:

62. A Grower who is an 'STS taxpayer' (for the 2004-05 income year) or an 'STS taxpayer' using the cash accounting method (for the 2005-06 and later years) is assessable on ordinary income from carrying on their business of afforestation in the income year in which that income is received.

4. Paragraph 63

(a) In the table, replace the third row with:

(b) Replace Note (iii) with:

(iii)

Interest payable in arrears is deductible in full in the year that it is incurred where the Grazier is not an ' STS taxpayer' .

For the 2004-05 income year, such interest is deductible in full in the year it is paid where the Grazier is an ' STS taxpayer' .

For the 2005-06 and 2006-07 income years, such interest is deductible in full in the year that it is incurred where the Grazier is an ' STS taxpayer' using the accruals accounting method or in the year it is paid where the Grazier is an ' STS taxpayer' using the cash accounting method.

5. Paragraph 102

Replace the paragraph with:

102. A Grower who is an 'STS taxpayer' using the cash accounting method can, therefore, claim an immediate deduction for each of the relevant amounts in the income year in which the amount is paid. A Grower who is not an 'STS taxpayer' or is an 'STS taxpayer' using the accruals accounting method can claim an immediate deduction for each of the relevant amounts in the income year in which the fee is incurred.

This Addendum applies on and from 1 July 2005.

Commissioner of Taxation
16 November 2005

References

ATO references:
NO 2003/11684