Search

Winemaker drops tax scheme

TURMOIL in the tax-effective market has prompted WA wine company Evans & Tate to drop plans to use a Managed Invest-ment Scheme structure to fund its Australasian Vineyard Trust.

Instead, the group plans to follow the traditional property trust route to raise $12 million needed to buy property near Manjimup and develop a new 300 hectare vineyard to supply its Gnangara range.

The move coincides with new developments in the tax-effective sector with Tax Commissioner Michael Carm-ody telling a Perth audience that it could act against up to 30 promoters, possibly using administrative penalties.

Evans & Tate director Mike Calneggia said the AVT project would also be scaled back in year one to plant 100 hectares, with the remainder being completed the following year.

Mr Calneggia said he hoped to have AVT listed on the stock exchange with a market capitalisation of between $50 million and $75 million by early next year.

Several issues affecting the tax-effective market have made the current tax season one of the toughest on record, despite strong lobbying by the industry against allegedly heavy-handed treatment of investors by the Australian Tax Office.

The Federal Government has provided some sort of reprieve but the bad publicity has made investors cautious about these products.

Concerns about GST, the value of the investments and general economic conditions have added gloom to the sector.

Evans & Tate has decided that although a properly managed and facilitated tax-effective scheme is a legitimate way of raising money in the industry, recent events mean we can’t be associated with that industry,” Mr Calneggia said.

“We decided to go down the true property trust route.”

“The irony is that with interest rates falling we are finding it easier to raise money in the property trust scenario.”

AVT plans to acquire more land which will be leased by other winemakers, acting as a property trust similar to the Bunnings and Westfield models but based on vineyard assets.

“We are actively seeking listed companies as tennants in Australia and New Zealand.”

Login

(existing subscribers)

The password field is case sensitive.
Request new password

Add your comment

BNiQ Disclaimer