Description of private unit trusts
Private unit trusts are:
- generally small in size, and
- set up for participation by a small group of unit holders in a specific project, such as a real estate subdivision and development.
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Assessment of income from private unit trusts
Description of ostrich and emu farming ventures
Investors in ostrich and emu farming ventures fall into three categories, described in the following table.
Assessment of income from ostrich and emu farming ventures
|
Investor |
Description |
|
Speculative investors |
These investors buy chicks or juvenile birds which are:
The Australian Taxation Office:
|
|
Share farming investors |
These investors purchase birds, but instead of selling them after 2 years, enter into a share farming arrangement with the farmers. This involves an agreement where:
The ATO:
|
|
Investors in a managed investment scheme |
These are investors whose funds are pooled and who do not hold specific livestock as their own investment asset. The investment scheme must comply with Australian Securities Commission requirements for the registration and issue of a prospectus. |
Description of afforestation projects
Participation in afforestation schemes typically involves purchasing an identified parcel of trees:
- at a specific location, and
- under a purchase and sale agreement, such as the SAPFOR Forest Scheme or crop farming such as:
- macadamia nuts,
- aloe vera, and
- aquaculture projects.
The promoter of the afforestation scheme:
- secures an area of land for the period necessary for the trees to grow to maturity, and
- distributes the proceeds from the scheme as the trees are thinned, until the land is cleared.
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Assessment of income from afforestation projects
ATO ruling on afforestation
The ATO treats profits, losses, and business expenses under business rules. ATO Ruling IT 360 outlines the ATO position that, 'where a person alone or in association with others acquires an interest in an identifiable area of land and enters into an agreement to have that land developed, planted, and maintained by a management company for the purpose of growing forest trees it is accepted that the person may be carrying on a business of afforestation'.