INCOME TAX ASSESSMENT ACT 1997 - SECT 394.45 Direct forestry expenditure

INCOME TAX ASSESSMENT ACT 1997 - SECT 394.45

  (1)   Direct forestry expenditure under a * forestry managed investment scheme means:

  (a)   an amount paid under the scheme that is attributable to establishing, tending, felling and harvesting trees; and

  (b)   notional amounts reflecting the * market value of goods, services or the use of land, provided by the * forestry manager of the scheme, for establishing, tending, felling and harvesting trees.

Example 1: Notional amounts reflecting the value of the use of land owned by the forestry manager that is provided for establishing, tending, felling and harvesting trees.

Example 2: Notional amounts reflecting the value of tree felling services provided by the forestry manager.

  (2)   Treat * direct forestry expenditure covered by paragraph   (1)(b) as paid annually for each income year of the * forestry manager of the scheme based on the * market value of the goods, services, or the use of the land. Treat the day on which it is paid as:

  (a)   unless paragraph   (b) or (c) applies--1   January in the income year; or

  (b)   if the first time an amount is paid under the scheme is later than the first day of the income year--the last day of the income year; or

  (c)   if the scheme comes to an end on a day before the end of the income year--that day.

Exclusions--general

  (3)   However, direct forestry expenditure under the scheme does not include amounts paid under the scheme to the extent that they relate to any of the following:

  (a)   marketing of the scheme;

Example:   Advertising, sales, sponsorship and entertainment.

  (b)   insurance, contingency funds or provisions (other than provisions for employee entitlements);

  (c)   financing;

  (d)   lobbying;

  (e)   general business overheads (but not overheads directly related to forestry);

  (f)   subscriptions to industry bodies;

  (g)   commissions for financial planners or financial advisers;

  (h)   compliance with requirements related to the structure and operations of the * forestry manager of the scheme;

Example:   Product design and preparation of product disclosure statements.

  (i)   supervision and auditing of contracts, other than direct supervision of direct forestry activities (such as establishing trees for felling);

  (j)   legal fees relating to any matter mentioned in this subsection.

Exclusions--expenditure after harvest etc.

  (4)   Also, direct forestry expenditure under the scheme does not include amounts paid under the scheme to the extent that they relate to any of the following:

  (a)   transportation and handling of felled trees that happens after the earliest of the following:

  (i)   sale of the trees;

  (ii)   arrival of the trees at the mill door;

  (iii)   arrival of the trees at the port;

  (iv)   arrival of the trees at the place of processing (other than where processing happens in - field);

  (b)   processing;

  (c)   stockpiling (other than in - field stockpiling);

  (d)   marketing and sale of forestry produce.

Table of Subdivisions

  Guide to Division   405

405 - A   Above - average special professional income

405 - B   Assessable professional income

405 - C   Taxable professional income and average taxable professional income