A forestry MIS arrangement is associated with a land trust arrangement. 2. A land company within the group owns (or acquires) the land and grants a head-lease to the responsible entity (also within the group) for the land to be used in the forestry MIS. 3. The responsible entity grants a sub-lease over the land to the investors in the forestry MIS. 4. The fees payable under both the head-lease and sub-lease are usually set as a proportion of the value of distributions to be made at the end of the MIS arrangements, payable from the harvest proceeds. 5. As soon as the forestry MIS arrangement begins, the land is immediately sold by the land company to a land trust which sits outside the group. 6. This sale is said to give rise to a loss as the value of the land is impaired by the lease fees payable being lower than market value for the duration of the lease (usually more than 10 years). 7. The trustee for the land trust may be a member of the group or an associate of such a member. 8. Entities that are members of the group may hold some of the units in the land trust, frequently up to 20%. 9. The unit-holders in the land trust usually also include some or all of the investors in the forestry MIS and associates of members of the group, such as employees. 10. There may also be an option for the land company to re-acquire the land from the land trust. 11. The basic structure of the arrangement can be summarised diagrammatically as follows:
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