Further tax changes possible
Changes are possible to the ‘cost of standing timber’ provisions of the Income Tax Act. Farm Forestry members have been working to help willing owners aggregate their forests for economies of scale. One impediment has been the ‘cost of standing timber’ provisions of the Income Tax Act, which make it harder to pool forests into a single estate for management, harvesting and marketing. Prompted by members, over the years Inland Revenue has conceded a handful of exemptions to the provisions. Now they are about to consider another: allowing the use of a ‘look through’ vehicle to enable each forest owner to remain responsible for their own tax, even if the forests are aggregated. This is a simplification rather than a breakthrough, but it may be important. Officials have issued a discussion paper and would like submissions by 31st January. Hamish Levack and Howard Moore will be drafting one, and would welcome any comments or feedback from other members.
The paper is available here »