In a media release issued on 18 December 2009, the Assistant Treasurer, Senator Nick Sherry, announced the release for public consultation of 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 law relating to the four-year holding period rule - to ensure it cannot be failed for reasons genuinely outside an investor's control," the Assistant Treasurer said.
Specifically, the draft legislation amends the four-year rule to allow an investor's deduction to stand if:
a 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 will 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.
Submissions were sought by Friday 15 January 2010.
For a copy of the Minister's media release, No 2009/116, 18 December 2009, go here
For a copy of the draft legislation and explanatory material, go here