Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 394 - Forestry managed investment schemes  

SECTION 394-35   70% DFE rule  

394-35(1)    
A *forestry managed investment scheme satisfies the 70% DFE rule on 30 June in an income year if it is reasonable to expect on that 30 June that the amount of DFE under the scheme (see subsection (2)) is no less than 70% of the amount of the payments under the scheme (see subsection (3)).

394-35(2)    
The amount of DFE under the scheme is the amount of the net present value (on that 30 June) of all *direct forestry expenditure under the scheme that the *forestry manager of the scheme has paid or will pay under the scheme.

394-35(3)    
The amount of payments under the scheme is the amount of the net present value (on that 30 June) of all amounts that all current and future *participants in the scheme have paid or will pay under the scheme.

394-35(4)    
In working out the net present value of an amount paid before that 30 June:

(a) unless paragraph (b) applies - treat the amount as having been paid on that 30 June; or

(b) if the amount was paid in an income year ending before that 30 June - treat the amount as having been paid on the 30 June in that income year.

394-35(5)    
In working out the net present value of an amount expected to be paid after that 30 June, treat the amount as having been paid on 1 January in the income year in which it is expected to be paid.

394-35(6)    
Reduce an amount worked out under subsection (2) or (3) to the extent (if any) to which that amount can reasonably be expected to be recouped.

394-35(7)    
In working out the net present value of an amount for the purposes of this section, use the yield on Australian Government Treasury Bonds with the maturity closest to 10 years (as published by the Reserve Bank of Australia).

394-35(8)    
For the purposes of subsection (2), if:

(a) the *forestry manager of the scheme has paid or will pay an amount under the scheme in a transaction; and

(b) the forestry manager and at least one other party to the transaction did not or will not deal at *arm's length in relation to the transaction; and

(c) the amount is or will be more or less than the *market value of what it is for;

treat the amount as that market value.