Investing in Woodland
With controversy over the UK Government’s plans to sell off 75,000 acres of national woodland, is now a good time to be investing?
Woodland values have been strong over the past few years – in fact the average price is said to have grown by 17pc a year over the last five years alone. And there are very few investments that can beat or match this figure over the same time period.
If you are looking to invest in woodland there are a few things to note. Firstly, there are a range of woodland types available – including commercial, recreational and heritage. Owners of woodland must provide public access, maintain and protect the landscape, and manage timber within a set of constraints.
Most investors tend to plump for commercial woodland because of the tax benefits – income from timber sales is tax free. There are also a number of grants available for this kind of woodland. However if income from the woodland is derived from other aspects, for example through rent or sports, this income is taxable.
Although the land value will be subject to capital gains tax, any growth in the value of the timber on the plot is free of CGT. Any woodland that has been owned for two or more years is also free from inheritance tax.
If you haven’t got the funds to buy an entire forest, you can still cash in on woodland. There are ‘forest funds’ which allow investors to put money into a forest, much like stocks and shares. Returns are made from rising timber harvest and increasing land values. Similar to stocks and shares, most people advise that money invested into woodland should be seen as a long-term investment and should remain invested for ten years or more.
Category: Savings & Investments
Tags: Investments, Savings, Woodland
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