Posted On: April 9, 2008
The Full Federal Court in Perth has ruled in favour of the Australian Taxation Office (ATO) over deductions claimed by a taxpayer in a sandalwood plantation managed investment scheme (MIS). The court heard that accountant Gino Lenzo had not received any income from the project to date, and the ATO had refused several annual deductions for the scheme’s prepaid fees, loan interest and loan insurance. The court found that the MIS structure was designed to maximise and bring forward tax benefits and was irrelevant to the growing and marketing of sandalwood. Agricultural specialist Sam Paton believes the court finding will strengthen the ATO’s resolve to review the entire tax support system of managed investment schemes.
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