No deductions for agricultural schemes

The Australian Tax Office has reconfirmed its view that investments in agricultural schemes are of a capital nature and therefore are not tax deductible. The ATO said that the deductions were not possible as such investments were paying for an income producing asset and the ruling will apply after June 2008. The move is being challenged with industry body Agricultural Investment Managers Australia submitting a proposed test case to the ATO. The case would use an almond project that has been purposely built to test common features of all managed investment schemes. Forestry schemes will be able to continue as long as they meet certain conditions, however if the ruling stands non-forestry schemes will be wound up before the end of the financial year.