Tax Laws Amendment (2008 Measures No. 2) Act 2008 (38 of 2008)

Schedule 8   Capital expenditure for the establishment of trees in carbon sink forests

Part 2   Income year 2012-13 and later income years

Income Tax Assessment Act 1997

20   At the end of Subdivision 40-J

Add:

40-1030 Extra deduction for destruction of trees in carbon sink forest

(1) You can deduct the amount worked out under subsection (2) for an income year if:

(a) you or another entity incurred capital expenditure that is covered under section 40-1010 in relation to particular trees; and

(b) you use the land occupied by the trees for the primary and principal purpose of *carbon sequestration by the trees; and

(c) the trees are destroyed during the income year; and

(d) you satisfy a condition in subsection 40-1005(5) for the trees just before they are destroyed.

(2) Work out the amount of the deduction as follows:

Method statement

Step 1. Work out the total of the amounts you could have deducted under this Subdivision in relation to the trees for the period:

(a) starting on the first day of the income year in which the trees are established; and

(b) ending when the trees were destroyed;

assuming that, during that period, you satisfied a condition in the table in subsection 40-1005(5).

Step 2. Subtract from the expenditure that is covered under section 40-1010 in relation to the trees:

(a) the result from step 1; and

(b) any amount you received (under an insurance policy or otherwise) for the destruction.

The remaining amount (if positive) is your deduction under subsection (1).

(3) This deduction is in addition to any deduction for the income year under section 40-1005.

40-1035 Getting information if you acquire a carbon sink forest

(1) This section applies if:

(a) you or another entity incurred capital expenditure; and

(b) the expenditure is covered under section 40-1010 in relation to particular trees; and

(c) you begin to satisfy a condition in the table in subsection 40-1005(5) for the trees.

(2) You may give the last entity (if any) that satisfied a condition mentioned in subsection 40-1005(5) for the trees a written notice requiring the entity to give you any or all of the following information:

(a) the amount of the expenditure covered under section 40-1010 in relation to the trees;

(b) the income year in which the trees were established.

(3) The notice must:

(a) be given within 60 days of your beginning to satisfy the condition mentioned in paragraph (1)(c); and

(b) specify a period of at least 60 days within which the information must be given; and

(c) set out the effect of subsection (4).

Note: Subsections (5), (6) and (7) explain how this subsection operates if the entity to which the notice is to be given is a partnership.

Requirement to comply with notice

(4) The entity to whom the notice is given must not intentionally refuse or fail to comply with the notice.

Penalty: 10 penalty units.

Giving the notice to a partnership

(5) If the entity to whom the notice is given is a partnership:

(a) you may give it to the partnership by giving it to any of the partners (this does not limit how else you can give it); and

(b) the obligation to comply with the notice is imposed on each of the partners (not on the partnership), but may be discharged by any of them.

(6) A partner must not intentionally refuse or fail to comply with that obligation.

Penalty: 10 penalty units.

(7) Subsection (6) does not apply if another partner has already complied with that obligation.

Note: A defendant bears an evidential burden in relation to the matters in subsection (7), see subsection 13.3(3) of the Criminal Code.

Limits on giving a notice

(8) Only one notice can be given in relation to the same trees.