Product Ruling
PR 2005/15A - Addendum
Income tax: 2005 Timbercorp Almond Project - Early Growers (to 15 June 2005)
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FOI status:
may be releasedAddendum
This Addendum amends Product Ruling PR 2005/15 to reflect changes to simplified tax system legislation from 2005-06 onwards.
PR 2005/15 is amended as follows:
Replace the paragraph with:
68. 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:
71. Other than Growers referred to in paragraph 72, a Grower recognises ordinary income from carrying on their business of horticulture in the year in which that income is derived.
Replace the paragraph with:
72. 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) recognises ordinary income from carrying on their business of horticulture 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 |
|---|---|---|---|
| 'Management Fee' | $7,000 See Notes (i), (ii) & (iii) |
$1,500 See Notes (i), (ii) & (iii) |
$1,500 See Notes (i), (ii) & (iii) |
| 'Rent' | nil | $500 See Notes (i), (ii) & (iii) |
$500
See Notes (i), (ii) & (iii) |
| Interest on loans with 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) |
| 'Loan Application Fee' 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) |
(c) Replace Note (ii) with:
(ii) Where the Grower is not an 'STS taxpayer' or who is an 'STS taxpayer' using the accruals accounting method (for the 2005-06 and 2006-07 income years), the 'Management Fees' and the 'Rent' shown in the Almondlot Management Agreement and the Sub-lease Deed are deductible in full in the year that they are incurred. Where the Grower 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 2006-07 income years), these fees are deductible in full in the year in which they are paid.
Replace the paragraph with:
103. A 'Participant Grower' who is an 'STS taxpayer' (for the 2004-05 income year) or an 'STS taxpayer' continuing to uses the cash accounting method (for the 2005-06 and 2006-07 income years) can, therefore, claim a deduction for each of the relevant amounts in the income year in which the amount is paid. A 'Participant Grower' who is not an 'STS taxpayer' or who is an 'STS taxpayer' using the accruals accounting method (for the 2005-06 and 2006-07 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
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