[Pil-pc-oceania] FWD MESSAGE: from Ethinvest

[petra.kahle at haztech.com.au]

I was under the impression that these schemes are on a special deal at the
moment where the investors get an immediate tax relief when they invest

and the change was going to be that the tax relief is going to be like for
other businesses where you have to depreciate those costs over a period of
time

and the reason for the change as I understand is because it seemed to make
it harder for other farmers who have to depreciate their stock and
machines etc over time.

In summary it seems reasonable to me to change.
Petra Kahle, in Ashburton, Vic

> The following message is forwarded on request...
>
> From: "Trevor Thomas" <tthomas at ethinvest.com.au> Date: 7 February 2007
> 11:18:05 AM To: "Earth Literacy S/F" <rowe at lisp.com.au> Subject:
> Timbercorp
> Announcement
>
>>> Dear
>>>
>>> Yesterday the Federal Government announced that the Australian Tax
>>> Office was reversing its decision to allow tax-deductions for the
>>> up-front costs of horticultural managed investment schemes effective
>>> from July 1 2007.
>>>
>>> This does not affect plantation timber, but means that the future of
>>> almond, olive, grape and other horticulture projects is under a
>>> significant cloud. Existing projects are unaffected, but the =20
>>> announcement
>>> suggests that the up-front costs of new projects  would not be
> tax-deductible.
>>>
>>> This had an immediate negative impact on the share price of =20
>>> Timbercorp,
>>> which has been the prime driver of this style of =20 investment in the
>>> horticulture sector. Timbercorp management has =20 responded strongly
>>> to the
>>> news as you can read in the attached =20 announcement.
>>>
>>> The key points that it makes are:
>>>
>>> 1. Rural Australia needs investment in highly water efficient,
>>> profitable
>>> industries. Timbercorp provides this investment and  will not be able
>>> to do
>>> so to anything like the same extent after 2007  if the ATO does not
>>> reverse
>>> it view. Investors in horticultural projects are legitimately carrying
>>> on a
>>> business, and therefore should be entitled to the same tax treatment as
>>> any
>>> other business - i.e. expenses should be tax deductible. The ATO has
>>> previously lost a test case in the courts where it argued that MIS
>>> investors
>>> were not carrying on a business. The Government should introduce a
>>> transitional or review period  during which time the legality of the
>>> new ATO
>>> decision can be tested in the courts
>>>
>>> At the present time we recommend that you take no action, as this is
>>> unlikely to be the last word on the matter. Indeed other Government
>>> ministers have been outspoken in their support of managed agricultural
>>> investment schemes in the recent past.
>>>
>>> Ross and I have just returned from a day and a half in the Robinvale -
>>> Swan Hill area reviewing horticultural projects and were impressed with
>>> the investment and job creation that these projects generate. We also
>>> view
>>> the high levels of water  efficiency and profitability per litre of
>>> water
> used on these farms as  setting the tone for the future of Australian
> agriculture in the Murray Darling basin.
>>>
>>> We will keep you informed of developments as they unfold.
>>>
>>> Kind regards, Trevor
>>>
>>> Trevor Thomas B.Ec (Hons.) MBA CFP General Manager
>>>
>>> Ethinvest Pty Ltd Australian Financial Services Licence 223718 PO Box
>>> 692
>>> Chatswood NSW 2057