Tax Woes? Drink Up

Sun Herald

Saturday June 15, 1996

By DEBBIE NEILSON

THE chance to own your own vineyard is the latest get-rich-with-tax-breaks scheme offering to relieve those end of financial year tax woes.

Whether pine forest plantations, macadamia nuts, ostriches or films, the schemes entice investors by promising huge tax deductions.

But national tax technical director with accountants Ernst & Young Dr Justin Dabner warned these schemes sometimes went broke because "the essence of it is as a tax advantage and there's no one really making sure that the business makes a profit".

Australian Vintage Management Limited at least boasts as directors politician Ian Armstrong, cheesemaker and stone fruits exporter Denis Brancourt, chief executive officer of the listed company Rothbury Wines Denis Power and chartered accountant and agriculturalist Philip Wrass.

It is offering 1,000 individual vineyards in Forbes at $23,000 each if pre-paid or $27,450 if paid in monthly instalments. A loan repayment plan which carries 14 per cent interest for the first two years (then 7.5pc) can be arranged.

Each grower's vineyard has 448 vines and covers 0.2ha-part of a total area of 200ha.

A 98pc tax deduction is forecast from any pre-paid contributions to the fund such as management fees and some establishment costs. But there is no guarantee that the total amount would be successfully deducted.

Some produce will be sold under long-term contracts to Len Evans' Rothbury Wines which last week accepted a takeover offer from Foster's.

Profits are expected within two years.