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Global Interest In Gunns Sales
21 Oct, 2013 CAROLYN CUMMINS GLOBAL interest is being fielded for former parts of the greater Gunn’s estate – the AFPT and AFPT 2 timberland portfolios, which have been put on the market. Prospective buyers range from Australian pension funds to high net worth individual investors and overseas pension funds. A price tag of about $50 million was suggested for the 94 forestry products in the portfolio. The Tasmanian assets are being sold by CBRE Agribusiness on behalf of Peter Anderson and Shaun Fraser of McGrathNicol as “Joint and Several” receivers and managers of the Australian Forestry Plantations Trust (AFPT) and the Australian Forestry Plantations Trust No. 2 (AFPT 2). Gunns, based in Tasmania, was placed into voluntary administration in September last year after the ANZ-backed syndicate withdrew support for the forestry group’s recapitalisation. This also included the group’s long-running attempt to obtain approvals to develop a timber pulp mill at Bell Bay, estimated to cost $2.3 billion. The agent, David Smith, CBRE’s head of timberland transactions, said the sale campaign had already generated wide-ranging preliminary interest. Mr Smith said two portfolios were being offered for sale in one line or separately. They comprise 94 properties with a total of about 11,757 hectares of hardwood plantation across a total land title area of 21,777 hectares. In addition to the timberland assets, the portfolios include 17 residential houses as well as significant existing infrastructure in the form of an extensive network of internal and external roads. “We have already fielded inquiries from domestic pension funds and institutions, local farmers, high net worth investors, offshore institutions and even an international pulp mill owner interested in future fibre security,” Mr Smith said. “The portfolio has generated interest from a biomass perspective, from parties looking at the potential future supply for production of biofuels, as well as from prospective purchasers considering the managed conversion of the land back to various forms of agriculture.” Continue reading
Is Farmland A Sound Investment?
http://www.ft.com/cms/s/0/2f160f5e-ce9f-11e2-8e16-00144feab7de.html#ixzz2hyPlkVqB By Lucy Warwick-Ching Cow©Robert Thompson I inherited a substantial amount of money recently and have always dreamed of owning some land in the country. Everything I read seems to tell me that farmland is a sound investment, but are there any additional tax benefits to be gained by investing in it? Andrew Arnott, partner in the landed estates and rural business group at wealth management group Saffrey Champness says farmland indeed continues to be a steady investment. The latest Royal Institution of Chartered Surveyors (Rics) survey revealed that UK farmland now costs an average of £7,440 an acre, compared with £2,400 an acre in 2004. Rising values aside, the tax benefits available are another incentive. However, it is not as easy to claim these benefits as it once was – HM Revenue & Customs (HMRC) wants to ensure that such benefits are only available to those actively farming the land, rather than to those aspiring to a farming lifestyle or seeking the benefits of a large house in a rural location. Such tax benefits include exemptions from inheritance tax (IHT) and capital gains tax (CGT) under certain circumstances, the ability to offset any losses from the farm against profits made elsewhere, and benefits by way of value added tax (VAT). IHT relief is available where the land has been farmed in person for at least two years, or where the land has been let to a tenant who has farmed it for seven years. Depending on the type of tenancy, IHT relief can be available at either 50 per cent or 100 per cent of the value of the land concerned. Where you qualify for 100 per cent relief, then assets such as land and buildings can be passed on to heirs free of any IHT liability, either during lifetime or upon death. There are specific stipulations covering cottages, their use and occupation, for them to qualify for exemption. There have been a number of prominent cases with regard to farmhouses and IHT, but a general rule is that the house must be “of a character appropriate”, and “proportionate” in size in relation to the area of the land. If it does not pass these tests then it is highly likely to fail should it be tested by the courts. HMRC has shown its enthusiasm to contest on a number of occasions – with varying degrees of success. Equestrian interests are not usually regarded as farming, and land or buildings to keep horses do not qualify for the same exemptions. With woodland, generally the trees will be exempt from IHT but the land not, although there may be the opportunity to claim business property relief (BPR) for it. While farmland is generally liable for CGT on disposal, there are reliefs available if disposed of as a business asset. For example, “hold-over relief” may be relevant where the farm is being passed on to the next generation, or “entrepreneur’s relief” if it is being sold to a third party. Rollover relief should also be available where farmland assets are disposed of and the proceeds invested in further farmland or buildings. Send your questions to: money@ft.com Forum Farmers are generally able to recover all the VAT they incur on business purchases and expenses, and farmland often offers useful security against bank lending. Add all that together and it certainly has a lot in its favour – although equally, it is definitely not an option for everyone. Continue reading