Revenue Minister Bill Birch and Forestry Minister Lockwood Smith have announced they will look into changing legislation to make it possible for a person to grant themselves a forestry right. The tax treatment of such a transaction will also be considered.
``We have been made aware of a problem being experienced by mainly small forest owners who wish to sell their land but retain the ownership of their trees,'' the Ministers said today.
At present the Forestry Rights Registration Act prevents owners from granting a forestry right to themselves. This means that if a forest owner wishes to sell land but retain the ownership of the trees on that land, they first need to grant a forestry right to a third party then have that third party sell the right back to them. Not only is this process cumbersome but it also incurs unnecessary transaction costs and, more importantly, tax liabilities.
``It seems inequitable that a taxpayer should be penalised when they simply want to retain ownership of an asset,'' the Ministers said.
Resolving the situation will require minor amendments to both the Forestry Rights Registration Act and the Income Tax Act. The Ministers will seek Cabinet approval to include the appropriate amendments within legislation already on the legislative programme.
Due to the extremely tight programme this year it may be impossible to introduce the changes to Parliament until late 1997 or early 1998.