The fund may be able to claim a deduction at U for payments made to an FMIS if:
- the fund currently holds a forestry interest in an FMIS, or held a forestry interest in an FMIS during the 2007-08, and
- the fund paid an amount to a forestry manager of an FMIS under a formal agreement.
The fund can claim a deduction at U only if the forestry manager has advised you that the FMIS satisfies the 70% direct forestry expenditure rule in Division 394 of the Income Tax Assessment Act 1997.
If the fund is an initial participant, it cannot claim a deduction if it disposed of the forestry interest in an FMIS within four years after the end of the income year in which a payment was first made.
If the fund is a subsequent participant, it cannot claim a deduction for the amount paid for acquiring the interest. The fund can only claim a deduction for ongoing payments.
The fund is an initial participant in an FMIS if:
- it obtained the forestry interest in the FMIS from the forestry manager of the scheme, and
- the payment to obtain the forestry interest results in the establishment of trees.
The fund is a subsequent participant if it is not an initial participant.
A forestry manager of an FMIS is the entity that manages, arranges or promotes the FMIS
A forestry interest in an FMIS is a right to the benefits produced by the scheme (whether the right is actual, prospective or contingent, and whether it is enforceable or not).
Initial participants can claim at U initial and ongoing payments made under an FMIS that were made as an initial participant of the FMIS.
Subsequent participants can claim at U ongoing payments made under an FMIS that were made as a subsequent participant of the FMIS.
Excluded payments
The fund cannot claim a deduction at U for any of the following payments:
- payments for borrowing money
- interest and payments in the nature of interest (such as a premium on repayment or redemption of a security, or a discount of a bill or bond)
- payments of stamp duty
- payments of GST
- payments that relate to the transportation and handling of felled trees after the earliest of the following:
- sale of the trees
- arrival of the trees at the mill door
- arrival of the trees at the port, or
- arrival of the trees at the place of processing (other than where processing happens in-field)
- payments that relate to processing, and
- payments that relate to stockpiling (other than in-field stockpiling).
Show at U the total amount of deductible payments made to an FMIS.