ATO urges MIS promoters to find test case

The promoters of managed investments schemes need to come up with a test case on the deductibility of investment in both forestry and non-forestry managed investment schemes, according to the Commissioner of Taxation, Michael D’Ascenzo.

If the scheme promoters can come up with the test case, then the Australian Taxation Office (ATO) would ask the Federal Court to progress it on an urgent basis.

D’Ascenzo said that while the ATO might offer to fund a test case on the managed investment schemes, it was up to the promoters of such arrangements to find a case and to commence such proceedings.

He told a Law Council of Australia conference at the weekend that as the matter of managed investment schemes was not free from doubt, it was best if it was clarified by the courts.

“First, however, there needs to be a dispute,” D’Ascenzo said.

“While we can offer to fund such a case, it is up to the promoters of these arrangements to find a case and to commence such proceedings.”

“We have been working closely with industry and affected taxpayers to urgently identify and expedite a test case while allowing transitional relief in the interim,” he said.

“To expedite matters, we intend to seek (with industry consent) two motions in the Federal Court.”

D’Ascenzo said those motions would involve an urgency motion to have a test case resolved quickly and a request for a hearing by the Full Federal Court on the basis of importance and the public interest.

He said that in progressing the matter, promoters could use a private binding ruling application on a real project that would be offered in the 2008-09 financial year as the basis for the test case.