Tax office paralyses agribusiness schemes
Delaysin the issuance of product rulings by theAustralian Taxation Office(ATO) have threatened the ability of a number of prominent agribusiness managed investment schemes to raise funds this year.
Without a product ruling, an adviser is unable to sell a scheme to a client, as the tax benefits may not flow through without it.
A number of prominent agribusiness players, such as Gunns, Barkworth Olives, Timbercorp (olive scheme) and the Rewards Group (teak project), are still waiting for a ruling from the ATO.
Barkworth has resorted to a court action against the ATO to gain its ruling and a judgement in the case was expected asMoney Managementwent to press.
Inglewood Olive Processors (a subsidiary of Barkworth) confirmed that legal action has been running since it lodged its application for a product ruling in October last year.
Adviser Edge Investment Research managing director Shane Kelly says the issuing of product rulings were down 50 per cent compared to the same period last year.
“This time last year, between January 1 and the end of April, 50 product rulings had been issued. This year just 17 have been issued.”
Barkworth managing director Mark Troy has accused the ATO of punishing the group for trying to have the matter settled in the courts.
“Barkworth took the ATO to court last year over the delays in issuing a product ruling for the Number Six prospectus and we won, three weeks before the end of the prospectus,” he says.
“As a result, we sold nothing from that prospectus and now we have taken the ATO to court again on the seventh prospectus.”
In a hearing before the Federal Court, the ATO has argued the matter should be heard before the Administration Appeals Tribunal, however, Barkworth argued it was within the jurisdiction of the court.
Kelly says no olive project this year has been given a product ruling yet. According to theMoney ManagementAgribusiness Survey (February 27), there were six olive projects in the marketplace this year.
“These projects only have just over a month to sell units and it looks like a lot of projects will not be going ahead.”
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