February 13, 2014
Tax change could halt buy back strategy
Taranaki’s Parininihi ki Waitotara Incorporation has stepped up its challenge to a law change that would make it harder to buy back leases from farmers.
Chief executive Dion Tuuta told Parliament's finance and expenditure select committee this week that included in this year’s proposed tax changes is a provision to tax lease surrender payments as taxable.
That means if one of its lessees sells their farm to a third party, they would not be taxed.
But if they sell to PKW, they will be hit with a tax bill because of the association between the two parties.
That would affect the incorporation’s policy of buying back leases when they become available, so it can farm the land itself.
Whanganui MP Chester Borrows said the bill was drafted to catch people who set up entities to avoid tax, but an exemption was clearly needed for West Coast Settlement Reserve Leases.
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