Land Diversification

With continuing farm subsidy uncertainties and rising input costs, farmers are now assessing the viability of land diversification and in particular the use of trees and woodland within their boundaries. Timber production can be a valuable source of income and it can also help reduce costs and provide a more certain and structured revenue stream for the future whilst contributing positively to the environment.

Timber

There is an increasing demand for felled timber, with prices at an all-time high. There are also specialised markets which can utilise the lower grade forestry material, increasing returns and decreasing waste from felling operations.

Fuel

For landowners with existing, more mature, woodland on site, it may be an untapped source of timber, firewood, or biomass material either for personal use or for sale. Alternatively, planting a new woodland offers the opportunity to utilise less productive areas of the landscape and can add value to not only the site but also the land around it, offering shelter and valuable environmental habitats.

Grant aid

A variety of Government grant schemes are available for woodland creation, allowing forestry owners the option to make further profits on their asset and enabling woodland to become a valuable part of their business. Carbon Credits are also beginning to play their part in the global war against climate change and these credits will most definitely feature as a further source of income derived from eligible woodland.

Tax benefits

Woodland offers a range of tax benefits and opportunities. The sale of felled, unprocessed timber is tax free creating a very lucrative source of income. The purchase of forestry also offers the ability to defer a capital gain realised on the sale of a business asset such as land and buildings or even some fixed plant and machinery. Managed woodland can also secure full Inheritance Tax (IHT) relief on death when qualifying for Business Property Relief (BPR) making the owning of forestry a very tax efficient asset.

Trees should no longer be seen as an unproductive asset by farmers and landowners. With the chaotic events from various storms of late, owners should apply renewed focus on their woodland and the management of this extremely valuable asset.

If you’d like to discuss your circumstances, please get in touch with your usual EQ contact, email agriculture@eqaccountants.co.uk or call one of our offices.