Application of section 82KZMG of ITAA 1936 if trees are grown for their produce

Does the concession in section 82KZMG of the Income Tax Assessment Act 1936 (ITAA 1936), apply to allow an immediate deduction for certain prepaid expenditure incurred under a plantation forestry managed agreement, when the trees are planted and tended for their produce such as bark, fruit or leaves?

No. Section 82KZMG of the ITAA 1936 only applies if the trees are planted and tended for felling.

A taxpayer prepays an investment of $10,000 in a managed agreement to plant and tend trees that will be harvested annually for their fruit and bark. The prepaid investment relates to seasonally dependent agronomic activities that must be undertaken by the manager during the establishment period of the planting of trees.

Paragraph 82KZMG(3)(a) of the ITAA 1936 provides that section 82KZMG of the ITAA 1936 will only apply where the agreement is for the planting and tending of trees for felling.

Accordingly, the requirement in paragraph 82KZMG(3)(a) of the ITAA 1936 is not satisfied.