Oh what a tangled web we weave, when first we practise to deceive.
The slow and tortuous wind up of the MIS companies Great Southern and Timbercorp has laid bare the legal complexities that were not envisaged by the Masters of the Universe who first created the monsters.
But it’s getting worse.
If the E Nitens are causing toxicity problems in the Georges River area, then maybe the owners of the trees should be getting a little twitchy.
It’s not Gunns or FEA, but the thousands of investors who have arranged for Gunns and FEA as Responsible (sic) Entities/ Managers to plant and manage the trees on their behalves.
It must be remembered that prior to 1st July 2007 investors needed to pretend they were carrying on a business of primary production for their MIS payments to be fully and immediately deductible.
They leased some land, at least 1/3rd of a hectare, and arranged for trees to be planted. The investors own the trees not the Manager. They were carrying on a business. With that must flow some responsibilities.
The new Div 394 of the Tax Act which applies since 1st July 2007 doesn’t require the pretence of running a business. But each investor still owns a woodlot as a Participant in a Forestry Management Investment Scheme. The Manager only looks after the trees, a sort of babysitter. It would appear Participants post 1st July 2007 have similar legal obligations to investors prior to that date.
They are the tree owners.
Alas, most don’t know whether their woodlots are located on the sand dunes at Temma or the termite infested hinterlands of the Tiwi Islands. Their first confirmation may be when they receive registered mail from Messrs Slater and Gordon.
Future participants might be reluctant to take up an interest in a MIS is there’s a chance they, as owners, might become liable for toxins emitted by their trees.
Who then is going to chip in and fund tree plantations in the future?
The ink’s barely dry on FFIC’s report on the New Forest Industry—A fresh Approach?
Terry, start re writing.