Draft Legislation to Protect Forestry Managed Investment Scheme Investors
18 December 2009
The Assistant Treasurer has today released for public consultation draft legislation to change a key tax rule for forestry managed investment schemes (MIS) that will protect investors in recently collapsed schemes.
The draft legislation amends the four-year rule to allow an investor's deduction to stand if:
a capital gains tax (CGT) event happens because of circumstances outside the initial investor's control; and
the initial investor could not have reasonably foreseen this CGT event happening, at the time they acquired the forestry interest.
The rule applies to CGT events from 1 July 2007 and the amendments in the draft legislation would take effect from this date.
The draft legislation also amends the promoter penalty provisions to ensure the law continues to deter forestry MIS covered by product rulings from being implemented in a way that is materially different from that described in the product ruling.
The draft legislation is available at www.treasury.gov.au and consultation closes on Friday 15 January 2010. This will allow the introduction of the legislation early in 2010.
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