Newsletter to Investors 20 April 2001

Tax Deductions Year to 31/3/2001

 

Dear Client,

Further to our newsletter on the 5th of this month we now have the unaudited tax loss figures for the four partnerships below.
As it will still be a few weeks before we can send out copies of the audited financial statements and your Tax Deduction Certificates, we thought we would give you this information right away in case you want to file your tax return sooner rather than later.
Please note however that these figures are unaudited, so could change. In the past they have not done so but it is always possible.

Partnership	Per unit Tax Loss	Resident Withholding Tax per unit
Amuri Hills Forest Partnership	$ 203.67	$0.12
Six Hills Forest Partnership	$ 412.42	$0.11
Insignis Forest Partnership	$ 613.77	$0.31
Triple Ridge Forest Partnership	$1,975.35	$1.71

So to calculate how much you can take off tour taxable income for the year ended 31 March 2001, you just multiply the tax loss figure for your Partnership by the number of units you own.
For example, below is a chart giving the figures for the typical unit holdings for each, together with a calculation of the tax saved or to be refunded:

Partnership	Units held	Total Tax Loss	Tax Saved at Marginal Rate
			24%	33%	39%
Amuri Hills	2	$ 407.34	$ 98	$ 134	$ 159
Six Hills	2	$ 824.84	$198	$ 272	$ 322
Insignis	1	$ 613.77	$147	$ 203	$ 239
Triple Ridge	2	$3,950.70	$948	$1,304	$1,541

You may note some important facts about these figures:

• For Amuri Hills, Six Hills and Insignis the deductible sum is greater than last year's contribution. This is due to depreciation feeding through, and it will continue. In the end about 90% of what you invest should come through as deductible. This is about 40% more than the land buying schemes.
• After the first year or maybe two years' larger investment, the tax savings pay or virtually pay for a few years' contributions. This will occur again following the investment required for pruning and thinning.
• The tax merits of forest investment are not a 'perk' or 'break' or some kind of anomaly, as some (non-investor) critics may have you believe. They are entirely consistent with standard business and individual tax rules. It's just that in plantation forestry there is usually a long time between 'inputs' and 'outputs'. You will have to pay tax eventually, but in the meantime it is only right that your far-sightedness is recognised!

Charles Etherington

PS: In the last newsletter I wrote about Carbon Credits & the Demise of Fletcher Forests. Some clients will not agree with my views on these and other matters. I should have made it clear that they are my opinion and not necessarily those of Warren Forestry Ltd. However if you do not agree with me, please feel free to debate the matter - my email is charles@warrenforestry.com. But be warned, I am a member of the 'Society for the Investigation of Claims of the Paranormal', otherwise known as The Skeptics Society!

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