Demand for wood products has brought upward pressure to bear on wood prices.
Commercial forest property continues to exceed supply in the UK.
The latest publication of the annual IPD UK Forestry Index shows that forestry
investment returns in the UK remained strong through 2013 and will continue to
The IPD UK Annual Forestry Index is calculated from a sample of private sector
coniferous plantations of predominantly Sitka spruce in mainland Britain.
In 2013, the IPD UK Annual Forestry Index showed a total return of 15.8% for the
year, a step down from the 18.6% seen in 2012 but continuing the trend for very
strong performance by forestry investment in the UK.
The decade to the end of 2013 has seen an excellent performance by UK forestry
investments with annualised total returns of 22.2%, 19.7% and 17.9% over 3, 5 &
10 years respectively and no years of negative returns. This performance should
be noted for its superiority over commercial property, residential property,
equities and gilts in all cases over 3, 5 and 10 years.
For UK-based investors, the tax reliefs available for investment in commercial
forests have been consistently maintained by successive governments. Here are
some facts for potential investors.
There is no income tax on harvested timber
There is no capital gains tax on the growth in the value of the tree crop only
on the land value.
An investment in forest property also qualifies for Business Property Relief (BPR)
which provides 100% relief against inheritance tax (IHT) after two years of
Investing in forest property requires a specialised and experienced
understanding of modern forest management practices and a detailed knowledge of
timber production and markets.
Our company has more than 20 years experience in assisting and independently
advising clients in identifying appropriate investment opportunities to suit
specific investment planning goals.
As part of our service we can prepare detailed reports to form part of a
Business Plan prior to acquisition as well as carrying out due diligence and
liaising with clients' legal teams.