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domwild
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Joined: 16/12/2005
Location: Australia
Posts: 873

Posted: 11:17pm 01 Jul 2011

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Hi,

Lots of IMS driven ag project have gone broke and lots of investors have lost lots of money investing in bluegums, olives, etc. A friend of mine got lots of tax back in the first year, then he found he had to spend more and more money every year on maintaining his plot and then the harvest never took place and he lost his money.

This project has come up recently and I invite you to have a look at the figures:

Been perusing this project and would like your comment on the following:

$5,000 fee for one unit or one hectare, min. 3 units must be purchased
$500 lease fee + $100 maintenance + insurance / annum over 10 years = > $6000

Total and disregarding NPV, CPI increases: $11,000

Tonnage per hectare about 260 in a good case
Stumpage (what you get net): $40/ ton in the best case at present
Result: 260 ton x $40/ton or about $10,000 net in ten years time after spending $11,000.

Am I correct in saying that in the first year you can write off the $5000 ingoing fee and possibly the other charges from your taxable income and that is the ONLY benefit you get?

Am going to be interested if I do get a reply from those people.

Taxation as a means of achieving prosperity is like a man standing inside a bucket trying to lift himself up.

Winston Churchill

windlight
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Joined: 03/03/2007
Location: Australia
Posts: 331

Posted: 04:05am 02 Jul 2011

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Dom you should already know the ins and outs of the blue gum schemes

I would never go into any scheme until I had a personal written Tax office ruling.

Personally I suspect the all in plantations failed because there were too many people creaming off dollars along the growth trail.

Allan of the jungle

"I like this place and willingly could waste my time in it" - (Act II, Scene IV).

VK4AYQ
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Joined: 02/12/2009
Location: Australia
Posts: 2539

Posted: 02:09pm 02 Jul 2011

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Hi Dom

We where involved in one of these 12 years ago and the government changed the land ownership rules to making it tax deductible only if you where the owner of the actual land they where growing on and not leasing the plot from a promoter. Lots of peope had to pay pay back the deductions they had and it sent many to the wall, this one sounds like a upgraded version of the original to me, Caveat Emptor.

It sounds like the Irish water melon truck to me.

All the best

Bob

Foolin Around

domwild
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Joined: 16/12/2005
Location: Australia
Posts: 873

Posted: 11:32pm 02 Jul 2011

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Friends,

Yes, I grow gums myself (no MIS) and know how much I am getting and I am not going to get roped in. I am secretely hoping the bots are picking up my warning (this message) and "investors" are seeing my warning on the net and decide not to get caught.

By the way, this scheme is allowable under the present taxation rules as far as I know and this refund might be the only benefit you can get.

A neighbour of ours leased his land for a MIS firm, which went broke. He was lucky, his thing was taken over by another co. and he is still getting his lease money MINUS lawyer's fees.

Taxation as a means of achieving prosperity is like a man standing inside a bucket trying to lift himself up.

Winston Churchill

domwild
Guru

Joined: 16/12/2005
Location: Australia
Posts: 873

Posted: 10:09pm 10 Jul 2011

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Did get an answer back from the co., which has modelled this scheme:

Projected return is estimated at 6.05% with an 87% probability of achieving it.

Taxation as a means of achieving prosperity is like a man standing inside a bucket trying to lift himself up.

Winston Churchill

powerednut

Senior Member

Joined: 09/12/2009
Location: Australia
Posts: 221

Posted: 03:41am 15 Jul 2011

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hmm... arn't high interest savings accounts still around that will return 7%? seem to remeber seeing a few online only accounts that payed out that much. why bother with 13% risk on a less than savings account return?

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