A leading independent property consultancy with expertise covering a broad spectrum of property related services

Is forestry a good investment?

Commercial forestry has been the top performing asset in the UK in the past 15 years, with the best woodlands generating returns of more than 10% a year.  Here our forestry team answer your questions on forestry investment. 

Is woodland a good investment?

Yes, owners can yield healthy returns from purchasing woodland, though maintenance costs may eat into profits. 

Forests aged 11-30 have shown the most increase in value, with the average price increasing by 50% since the early 2000s.

 

Can you buy woodland to live in?

Yes, but only temporarily, up to 28 days a year, unless you go through the appropriate planning permission process to erect a residential dwelling. 

 

Can you get planning permission on woodland?

Yes, but this must be done through the same planning regulations as any other planning permission application.  The likelihood of getting planning permission is dependent on the woodland type and location. 

 

Is Woodland exempt from inheritance tax?

Woodland is exempt from inheritance tax if it is purchased at least two years before the death of the buyer. The woodland must be under current commercial management though for this to apply, with a Long Term Forest Plan in operation. 

 

Is there stamp duty on woodland?

Stamp duty applies to woodland as it does to a residential property in England and Northern Ireland, though the thresholds differ. 

Stamp Duty Rates: 

Up to £150,000 - 0%
£150,001 to £250,000 - 2%
Over £250,000 - 5%

The Stamp Duty Tax equivalent in Scotland is the Land and Building Transaction Tax (LBTT), though woodland and agricultural land is not treated as residential property. 

LBTT Rates:

Up to £150,000 - Zero %
Over £150,000 to £250,000 - 1%
Over £250,000 - 5%

If the value is above the payment threshold, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within that band. For example, an office bought for £465,000 is charged at:

0% for the first £150,000;

1% for the next £100,000;

5% for the remaining £215,000;

 

So, £11,750 must be paid in LBT