Agribusiness organisation Almond Investors Limited (AIL) has launched a new investment product that will use self-managed superannuation funds (SMSFs) as the source of finance for the growing scheme instead of bank funding.
Under the product's structure, SMSFs will invest in units in an asset trust that will in turn own all of the almond orchard assets.
"We're the only agriculture project where the investors own all of the assets and that means the land, the irrigation, the infrastructure, and the almond trees," AIL executive director Wayne Overall said.
Once the trust has purchased all of the relevant assets individual investors, usually the members of the SMSF, make grower payments to lease the necessary assets to grow the orchards. The associated tax deductions are available to these individuals.
Grower payments continue to be made over the first six years of the scheme providing the unit trust and the SMSFs involved with an income stream.
Then between years six and 17 the trust receives 61 per cent of the harvest sale proceeds, with the remainder going to the individual growers, with the full proceeds of the harvest sales going to the trust between years 18 and 30 of the project.
"We want SMSF trustees to use a small part of their asset base for this investment. By funding the acquisition of the orchard assets themselves they act as their own bank, removing any need for bank finance," Overall said.
"People could invest in our project as part of a retirement planning strategy so that their investment is cash positive when they retire, thus giving themselves the opportunity to earn annuity income during their retirement years. Almond trees have a productive lifespan of 30 to 35 years so this is a long-term investment, but given the longevity of Australians entering retirement; it is not an exceptionally long timeframe," he added.
The minimum investment amount for one unit in the asset trust is $2000 and $7600 for one allotment in the grower project.
