19/12/2008 - 16:23

Federal Court approves MIS deductions

19/12/2008 - 16:23

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Great Southern has welcomed a Federal Court decision allowing the appeal in respect of the industry's test case on whether participants in non forestry managed investment schemes should be entitled to claim deductions in respect of carrying on a business

Great Southern has welcomed a Federal Court decision allowing the appeal in respect of the industry's test case on whether participants in non-forestry managed investment schemes should be entitled to claim deductions in respect of carrying on a business of primary production.

The Full Federal Court handed down their unanimous decision today in which they ruled in favour of the applicants.

The decision comes almost two years after the Australian Tax Office announced that it would re-interpret the law meaning investors would no longer be able to claim upfront deductions on non-forestry managed investment schemes (MIS) on the basis that investors are "carrying on a business".

The test case was heard in August this year.

Great Southern's chief executive Cameron Rhodes said "it was a long-awaited decision" and he was pleased with the outcome.

"The ATO's decision to reinterpret the tax laws caused a great level of uncertainty for the industry and indeed Great Southern. We were always confident that the industry's position was strong and supported by considerable precedent and our position has clearly been vindicated by the Court," Mr Rhodes said.

"Whilst the ATO has a period of 28 days to lodge any appeal against the decision to the High Court, we believe that the Court's decision should now end a long period of uncertainty and should provide us with opportunities and additional flexibility moving forward.

"Whilst Great Southern's future strategic and business plans are no longer reliant on nonforestry MIS, the court's decision will allow us to assess future opportunities in this area and consider future possibilities to add value to our business."

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