Advisers may face shortage at tax time

Advisers seeking to place funds with good quality agricultural investments at tax time may find they have left their run too late.

Advisers seeking to place funds with good quality agricultural investments at tax time may find they have left their run too late.

Changes to the 13 month tax rule outlined in the Ralph proposals have caused cash flow problems for some smaller agricultural schemes and have brought forward of-fers from some of the larger agricultural investment operations.

One of the biggest groups, Great Southern Plantations, has brought forward the closing capital raising for its blue gum projects to May 31 rather than the normal June 30 cut-off date.

Great Southern executive chairman John Young says the fund may even close early if demand continues at its current high levels.

Young says tax changes in the Ralph review may mean there are less investment choices available for advisers seeking good quality agricultural investments.

A report into Great Southern by Macquarie Equities says the Ralph changes will mean agricultural investments will be sold throughout the year rather than the usual rush at tax time.

“The changes to the prepayment deductibility rules last November necessitated a change from the traditional 30 June selling season for tax effective products,” the report says.

In fact, Great Southern raised $42.7 million through financial planners and ac-countants for its prospectus which closed in January, a startling eight times as much as the previous year’s $5.1 million.

Young says the recent figures are a significant landmark in the maturing of the in-dustry. He says there is likely to be some consolidation in the industry as there is greater acceptance of agricultural products that come from companies “with seri-ous management capabilities”.