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    From todays The Age. If a train makes a 'toot toot' what noise does a submarine make ?

    Tax breaks on horticulture investment schemes face July 1 deadline



    Nassim Khadem, Canberra
    February 7, 2007
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    THE Tax Office will strip tax concessions for non-forestry managed investment schemes from July 1, meaning investors that want to get tax breaks on a range of horticulture products will have to apply directly to the Federal Government.

    As reported recently in The Sunday Age, several federal cabinet ministers have expressed concern about tax breaks available under managed investment schemes for agriculture, accusing city investors of buying up the water rights of farmers, inflating rural property values and distorting commodity prices.

    West Australian Liberal MP Geoff Prosser, who has long argued that tax breaks in non-forestry managed investment schemes be removed because they distort prices and hurt farming families.

    The tax incentives were initially offered to encourage investment in the plantation timber industry, but there has since been a rapid expansion into markets such as avocados, nuts, olives, citrus, tomatoes, grapes, dairy and even wheat.

    In December the Government announced that investors in the plantation industry would continue to receive tax breaks under the scheme from July 1, but yesterday Revenue Minister Peter Dutton said the Government would not extend that to non-forestry managed investment schemes.

    He said the Government, the Tax Office and the forestry and industry players had been involved in extensive discussions in recent months over the future tax treatment of investments.

    The Tax Office is preparing a draft Taxation Ruling, which will set out its new position applying to arrangements entered into after June 30.

    Mr Dutton said the draft ruling would be subject to the usual consultation processes, but the Tax Office did not intend to issue any rulings based on the old interpretation for investments in forestry and non-forestry agribusiness managed investment schemes after the 2006-07 financial year. "The effect of the likely change … will be to place investments in non-forestry agribusiness managed investment schemes on the same footing as other passive investments in agriculture," he said.

    He said investments covered by existing product rulings would be protected.
 
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