Product Ruling
PR 2004/89A - Addendum
Income tax: 2005 Timbercorp (Single Payment) Timberlot Project - Pre 30 June Growers
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FOI status:
may be releasedAddendum
This Addendum amends Product Ruling PR 2004/89 to reflect changes to simplified tax system legislation from 2005-06 onwards.
PR 2004/89 is amended as follows:
Replace the paragraph with:
55. 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 or can continue to use the cash accounting method (called the 'STS accounting method' - see section 328-125).
Replace the paragraph with:
58. Other than Growers referred to in paragraph 59, a Grower recognises ordinary income from carrying on their business of afforestation in the year in which that income is derived.
Replace the paragraph with:
59. A Grower who is an 'STS taxpayer' or an 'STS taxpayer' continuing to use the cash accounting method recognises ordinary income from carrying on their business of afforestation in the year in which the income is received.
(a) Omit sentences before the table.
(b) Replace the table with:
| Fee Type | Year ended 30 June 2005 | Year ended 30 June 2006 | Year ended 30 June 2007 |
|---|---|---|---|
| Establishment Services | $3,080 See Notes (i) & (ii) |
||
| Interest paid to Timbercorp Finance Pty Ltd | As incurred ( Non-STS taxpayers ) or as paid ( STS taxpayers ) See Notes (iii) & (iv) |
As incurred ( Non-STS taxpayers & STS taxpayers using accruals accounting method ) or as paid ( STS taxpayers using cash accounting method ) See Notes (iii) & (iv) |
As incurred ( Non-STS taxpayers & STS taxpayers using accruals accounting method ) or as paid ( STS taxpayers using cash accounting method ) See Notes (iii) & (iv) |
| Borrowing costs for loans with Timbercorp Finance Pty Ltd | Must be calculated - see Note (v) |
Must be calculated - see Note (v) |
Must be calculated - see Note (v) |
Replace the paragraph with:
91. Under the Arrangement to which this Product Ruling applies fees for rent under the Sub-lease Agreement and fees for maintenance under the Management Agreement are only payable as a percentage of the proceeds from harvest and sale of the Trees or from insurance proceeds. Interest payable under the Loan Agreement to Timbercorp Finance is incurred monthly. Accordingly, the prepayment provisions in sections 82KZME to 82KZMF have no application to this Arrangement. A Grower who is an 'STS taxpayer' (for the 2004-05 income year) or an 'STS taxpayer' continuing to use the cash accounting method (for the 2005-06 and later income years) can, therefore, claim a 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 who is an 'STS taxpayer' using the accruals accounting method (for the 2005-06 and later income years) can claim a 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
7 December 2005
References
ATO references:
NO 2003/11684
ISSN: 1441-1172