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Taxation Ruling

TR 2007/8W

Income tax: registered agricultural managed investment schemes

Notice of Withdrawal

Taxation Ruling TR 2007/8 is withdrawn with effect from today. To the extent that a taxpayer entity relies on the Ruling, it continues to apply to schemes to which it applies that had begun to be carried out before the withdrawal but does not apply to schemes that begin to be carried out after the withdrawal.

1. Taxation Ruling TR 2007/8 deals with the application of section 8-1 of the Income Tax Assessment Act 1997 to contributions by investors to registered agricultural managed investment schemes. The view contained in TR 2007/8 is that the appropriate characterisation of these schemes is that the investor's contributions are capital as they obtain an income producing asset in the form of their interest in the scheme.

2. The view contained in TR 2007/8 was judicially tested in Hance v. FC of T; Hannebery v. FC of T [2008] FCAFC 196; 2008 ATC 20-085. On 19 December 2008, the Full Federal Court handed down its decision and found that the expenses incurred by the applicants pursuant to the scheme were: incurred in the course of carrying on a business; and had the character of outgoings on revenue account rather than capital account.

3. The Commissioner decided not to seek special leave to appeal to the High Court and so the decision of the Full Federal Court is now confirmed. The Commissioner will consider whether a new ruling is needed. In the meantime, applications for product rulings in relation to schemes similar to that considered by the Full Federal Court, will be handled in accordance with the Court's decision.

Commissioner of Taxation
11 February 2009

Not previously issued as a draft

References

ATO references:
NO 2006/20258

ISSN: 1039-0731

Related Rulings/Determinations:

TR 92/3
TR 2006/10

Subject References:
assessable income
carrying on a business
fee expenses
management fees
public rulings
tax shelters
taxation administration

Legislative References:
ITAA 1936 6(1)
ITAA 1936 26(a)
ITAA 1936 44(1)
ITAA 1936 51(1)
ITAA 1936 82KZME
ITAA 1936 82KZME(2)(a)
ITAA 1936 82KZME(3)
ITAA 1936 82KZMF
ITAA 1936 82KZMG
ITAA 1936 82KZMG(2)
ITAA 1936 82KZMG(3)
ITAA 1936 82KZMGA
ITAA 1936 82KZMGA(1)
ITAA 1936 Pt III Div 6
ITAA 1936 95(1)
ITAA 1936 96
ITAA 1936 97
ITAA 1936 Pt III Div 6C
ITAA 1936 102M
ITAA 1936 102N
ITAA 1936 102P
ITAA 1936 102P(1)(a)
ITAA 1936 102P(1)(b)
ITAA 1936 102P(1)(c)
ITAA 1936 102Q
ITAA 1936 102R
ITAA 1936 102S
ITAA 1936 102T(11)
ITAA 1936 102T(12)
ITAA 1936 102T(14)
ITAA 1936 Pt IVA
ITAA 1997 6-5
ITAA 1997 6-10
ITAA 1997 8-1
ITAA 1997 8-1(2)(a)
ITAA 1997 15-15
ITAA 1997 15-15(1)
ITAA 1997 Pt 3-1
ITAA 1997 118-20
ITAA 1997 960-100
ITAA 1997 Div 394
Corporations Act 2001 9
Corporations Act 2001 Ch 5C
Corporations Act 2001 601ED
Corporations Act 2001 601FA
Corporations Act 2001 601FB(1)
Corporations Act 2001 601FB(2)
Corporations Act 2001 601FC
Corporations Act 2001 601FC(2)
Corporations Act 2001 601GA
Corporations Act 2001 601GB
Corporations Act 2001 601HA
Income Tax Assessment Act 1922-1925
Trustees Act 1962 (WA)

Case References:
Anderson v. Commissioner of Taxation
89 ATC 4982
(1989) 20 ATR 1210


Australand Corporation (Qld) Pty Ltd v. Johnson& ors
[2007] QSC 13

Australasian Catholic Assurance Co Ltd v. Federal Commissioner of Taxation
(1959) 100 CLR 502

Australian Securities and Investments Commission v. Enterprise Solutions 2000 Pty Ltd
[2000] QCA 452
35 ACSR 620
158 FLR 220
[2003] 1 Qd R 135

Australian Securities and Investments Commission v. GDK Financial Solutions Pty Ltd
[2006] FCA 1415

Australian Securities and Investments Commission v. Hutchings
[2001] NSWSC 522
(2001) ACSR 387
(2001) 19 ACLC 1454

Australian Securities and Investments Commission v. Knightsbridge Managed Funds Ltd & anor
[2001] WASC 339

Australian Securities and Investments Commission v. Pegasus Leveraged Options Group Pty Ltd
[2002] NSWSC 310
(2002) 41 ACSR 561

Australian Securities and Investments Commission v. Takaran
[2002] NSWSC 834

Australian Securities and Investments Commission v. Young
(2003) 173 FLR 441

Burton & ors v. Arcus & Anor
[2006] WASCA 71

Case C13
[1952] 3 TBRD 104

Clowes & Anor v. Federal Commissioner of Taxation
(1954) 91 CLR 209
(1954) 10 ATD 316
(1954) 28 ALJ 41
[1954] ALR 293

Colonial Mutual Life Assurance Society Ltd v. Federal Commissioner of Taxation
(1953) 89 CLR 428

Commissioner of Taxation v. Broken Hill Pty Co Ltd
(2000) 179 ALR 593
2000 ATC 4659
(2000) 45 ATR 507

Commissioner of Taxation v. Cooke
[2004] FCAFC 75
2004 ATC 4268
(2004) 55 ATR 183

Commissioner of Taxation v. Sleight
(2004) 136 FCR 211
[2004] FCAFC 94
2004 ATC 4477
(2004) 55 ATR 555
(2004) 206 ALR 511

Crocombe v. Pine Forests of Australia Pty Ltd
[2005] NSWSC 151

Crow v. Federal Commissioner of Taxation
88 ATC 4620
(1988) 19 ATR 1565

Eisner v. Macomber
(1920) 252 US 189

Elsey v. Federal Commissioner of Taxation
(1969) 121 CLR 99
69 ATC 4115
(1969) 1 ATR 389

Enviro Systems Renewable Resources Pty Ltd v. Australian Securities and Investments Commission
[2001] SASC 11
(2001) 36 ACSR 762
(2001) 80 SASR 1

Evans v. Federal Commissioner of Taxation
89 ATC 4540
(1989) 20 ATR 922

Federal Commissioner of Taxation v. Citibank Ltd & ors
(1993) 44 FCR 434
93 ATC 4691
(1993) 26 ATR 423

Federal Commissioner of Taxation v. Lau
(1984) 6 FCR 202
84 ATC 4929
(1984) 16 ATR 55

Federal Commissioner of Taxation v. Montgomery
(1999) 198 CLR 639
[1999] HCA 34
99 ATC 4749
42 ATR 475

Federal Commissioner of Taxation v. South Australian Battery Makers Pty Ltd
(1978) 140 CLR 645
78 ATC 4412
(1978) 8 ATR 879

Federal Commissioner of Taxation v. Whitfords Beach Pty Ltd
(1982) 150 CLR 355
82 ATC 4031
(1982) 12 ATR 692

Federal Commissioner of Taxation v. Woolcombers (WA) Pty Ltd
(1993) 47 FCR 561
93 ATC 5170
(1993) 27 ATR 302

Hallstroms Pty Ltd v. Federal Commissioner of Taxation
(1946) 72 CLR 634

Harmer & Ors v. Federal Commissioner of Taxation
(1991) 173 CLR 264
91 ATC 5000
(1991) 22 ATR 726

Herdegen v. Federal Commissioner of Taxation
(1988) 84 ALR 271
88 ATC 4995
(1988) 20 ATR 24

Inland Revenue Commissioners v. Duke of Westminster
[1936] AC 1

Investa Properties Ltd & anor
[2001] NSWSC 1089

Investment & Merchant Finance Corporation Ltd v. Federal Commissioner of Taxation
(1971) 125 CLR 249

Lau v. Federal Commissioner of Taxation
(1984) 54 ALR 167

Manning v. Federal Commissioner of Taxation
(1928) 40 CLR 506

Martin v. Federal Commissioner of Taxation
(1953) 90 CLR 470

McLennan v. Federal Commissioner of Taxation
90 ATC 4047
(1989) 20 ATR 1771

Milne v. Federal Commissioner of Taxation
(1976) 133 CLR 526
76 ATC 4001
(1976) 5 ATR 785

Mier & Jonsson v. FN Management
[2005] QCA 408

Moana Sand Pty Ltd v. Federal Commissioner of Taxation
88 ATC 4897
(1988) 19 ATR 1853

New Zealand Flax Investments Ltd v. Federal Commissioner of Taxation
(1939) 61 CLR 179

Puzey v. Federal Commissioner of Taxation
[2002] FCA 1171
2002 ATC 4490
(2002) 50 ATR 595

Puzey v. Federal Commissioner of Taxation
(2003) 131 FCR 244
[2003] FCAFC 197
2003 ATC 4782
(2003) 53 ATR 614

Puzey v. Federal Commissioner of Taxation
[2004] FCAFC 23
(2004) 54 ATR 822

RAC Insurance Pty Ltd v. Federal Commissioner of Taxation
(1990) 95 ALR 515
90 ATC 4737
(1990) 21 ATR 709

Re Global Finance Group Pty Ltd (in liq)
(2002) 26 WAR 385

Re Westfield Holdings Ltd
[2004] NSWSC 602
(2004)49 ACSR 734

Royal Bank of Canada v. Inland Revenue Commissioners
[1972] Ch 665

Southern Wine Corporation Pty Ltd (in liq) v. Frankland River Olive Co Ltd & anor
[2005] WASC 236
[2005] WASCA 236

Syncap Management (Rural) Australia Ltd v. Lyford
[2004] FCA 1352

Taylor v. Federal Commissioner of Taxation
[2006] AATA 1120
2007 ATC 2001
65 ATR 857

The Registrar of the Accident Compensation Tribunal (Vic) v. Federal Commissioner of Taxation
(1993) 178 CLR 145
93 ATC 4836
(1993) 26 ATR 353

Sun Newspapers Ltd and Associated Newspapers Ltd v. Federal Commissioner of Taxation
(1938) 61 CLR 337

Vincent v. Commissioner of Taxation
[2002] FCA 656
2002 ATC 4490
(2002) 50 ATR 20

Vincent v. Commissioner of Taxation
[2002] FCAFC 291
2002 ATC 4742
(2002) 51 ATR 18
(2002) 124 FCR 350

Waldron v. Auer
[1977] VR 236

Other References:
Joint Media Release No. 097 from the Minister for Revenue and Assistant Treasurer and the Minister for Fisheries, Forestry and Conservation dated 21 December 2006

TR 2007/8W history
  Date: Version: Change:
  17 October 2007 Original ruling  
You are here 11 February 2009 Withdrawn  

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