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ATO Interpretative Decision

ATO ID 2003/487 (Withdrawn)

Income Tax

Application of section 82KZMG of ITAA 1936 if trees are grown for their produce
FOI status: may be released
  • This ATO ID is withdrawn from the database because it contains a view in respect of section 82KZMG of the Income Tax Assessment Act 1936. That section does not apply for the 2008-09 income year and later income years. This ATO ID continues to be a precedential view in respect of decisions for income years up to, and including, the 2007-08 income year.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Does the concession in section 82KZMG of the Income Tax Assessment Act 1936 (ITAA 1936), apply to allow an immediate deduction for certain prepaid expenditure incurred under a plantation forestry managed agreement, when the trees are planted and tended for their produce such as bark, fruit or leaves?

Decision

No. Section 82KZMG of the ITAA 1936 only applies if the trees are planted and tended for felling.

Facts

A taxpayer prepays an investment of $10,000 in a managed agreement to plant and tend trees that will be harvested annually for their fruit and bark. The prepaid investment relates to seasonally dependent agronomic activities that must be undertaken by the manager during the establishment period of the planting of trees.

Reasons for Decision

Paragraph 82KZMG(3)(a) of the ITAA 1936 provides that section 82KZMG of the ITAA 1936 will only apply where the agreement is for the planting and tending of trees for felling.

Accordingly, the requirement in paragraph 82KZMG(3)(a) of the ITAA 1936 is not satisfied.

Date of decision:  11 June 2003

Year of income:  Year ended 30 June 2003

Legislative References:
Income Tax Assessment Act 1936
   section 82KZMG
   subsection 82KZMG(3)

Related Public Rulings (including Determinations)
Taxation Determination TD 2003/12

Related ATO Interpretative Decisions
ATO ID 2003/488

Keywords
Advance expenses & payments for certain forestry expenditure
Deductions & expenses
Forestry agreement
Seasonally dependent agronomic activity

Business Line:  Finance and Investment Centre of Expertise

Date of publication:  27 June 2003

ISSN: 1445-2782

history
  Date: Version:
  11 June 2003 Original statement
You are here 6 July 2012 Archived

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