As an additional enhancement to encourage the early establishment of carbon sink forests, the Government will introduce immediate deductibility for costs incurred in establishing a qualifying carbon sink forest during a five year period commencing on 1 July 2007. The immediate deduction will take precedence over the general horticultural provisions during this 5 year period. Deductions under this measure will not be available to carbon sink forests established through managed investment schemes.
Currently, the costs of establishing a carbon sink forest are regarded as capital in nature and are treated under the CGT provisions of the tax law.
For a copy of the Treasurer's press release, No 2007/39, 8 May 2007, go here