INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision H - Period of deductibility of certain advance expenditure  

SECTION 82KZMG   DEDUCTIONS FOR CERTAIN FORESTRY EXPENDITURE  

82KZMG(1)   [ Timing of deduction]  

Sections 82KZMD and 82KZMF do not affect the timing of a deduction for expenditure incurred by a taxpayer in a year of income (the expenditure year ) to the extent that the requirements of this section are met.

82KZMG(2)   General requirements for expenditure.  

There are these requirements for the expenditure:


(a) it must be incurred on or after 2 October 2001 and on or before 30 June 2008 under an agreement; and


(b) the eligible service period for the expenditure must be 12 months or shorter and must end on or before the last day of the year of income after the expenditure year; and


(c) it must be incurred in return for the doing of a thing under the agreement that is not to be wholly done within the expenditure year.

82KZMG(3)   Requirements for agreement.  

There are these requirements for the agreement:


(a) the agreement must be for planting and tending trees for felling; and


(b) the taxpayer must not have day to day control over the operation of the agreement (whether or not the taxpayer has the right to be consulted or give directions); and


(c) at least one of these must be satisfied:


(i) there is more than one participant in the agreement in the same capacity as the taxpayer;

(ii) the person (the manager ) who manages, arranges or promotes the agreement, or an associate of that person, manages, arranges or promotes similar agreements for other taxpayers.

82KZMG(4)   Requirements for expenditure.  

The expenditure incurred by the taxpayer must be paid for seasonally dependent agronomic activities undertaken by the manager during the establishment period for the relevant planting of trees for felling.

Example:

Examples of seasonally dependent agronomic activities include:

  • · tending the seedlings prior to planting, and planting them;
  • · ripping and mounding the site where the planting is to occur;
  • · applying fertiliser, herbicide or pesticide in conjunction with the planting.
  • 82KZMG(5)   [ Establishment period]  

    The establishment period for a particular planting of trees starts on the day when the first seasonally dependent agronomic activity for that planting is done and ends on the later of:


    (a) the day when the last seedling is planted as part of that planting, not including replacement of seedlings already planted; and


    (b) the day when any fertiliser, herbicide or pesticide is applied to the seedlings in conjunction with that planting.


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