Draft ruling on registered agricultural managed investment schemes released

The Tax Office has released the draft ruling on the income tax treatment of registered agricultural managed investment schemes (TR 2007/D2 ).

Tax Commissioner Michael D’Ascenzo said developments in case law have required the Tax Office to reconsider its views on the deductibility of investments in both forestry and non-forestry schemes.

“Our reconsidered view is that investor contributions to such schemes are capital expenditure and therefore not deductible.“

The Tax Office is working with industry and affected taxpayers to urgently identify and expedite a test case to clarify this reconsidered view, and is allowing transitional relief in the interim.

The reconsidered view will apply to arrangements entered into from 1 July 2008.

Investments in agricultural managed investment schemes that are covered by existing product rulings will not be affected by the draft ruling, provided that the project is implemented in accordance with the product ruling.