Increased private involvement in woodland planting can deliver significant benefits

26 Sep 2018


Low rates of tree planting in England against ambitious targets set by government have made the climate favourable for private land owners to take advantage of grant schemes and tax incentives to increase woodland cover.

In 2017 only 1,500 ha of new woodland was planted in England following an even lower 800 ha in 2016. These numbers make government targets to increase England’s wooded area by 5000 ha per annum and achieve 12% woodland cover by 2060 even more challenging.

In Scotland, there is a different picture, with an annual Forestry Commission target to plant 10,000 ha per annum. 7,100 ha were planted in 2017-18, up by 2,300 ha on the previous year.

Jane Hill, a partner at Saffery Champness and a member of the firm’s Landed Estates Group, says:

“It now looks like the tree planting targets will be missed by a significant margin. What this means however is that there is real opportunity for private land owners and farmers to benefit, given that the overall disposition is already favourable towards increased planting and management, and that the Forestry Commission will be looking towards new private woodlands to help in playing catch-up.

“The fires in the USA and US/Canada trade restrictions have also brought fresh buoyancy to global timber prices. This is coupled with new tree planting grants coming on stream, and greater scope for segmentation in the timber market whereby the best quality timber can achieve the best returns. The overall picture for timber post-Brexit, in as much as any meaningful forecast can be made, will see support targeted towards the delivery of public benefits which in the woodland and forestry sectors include carbon offsetting, biodiversity, health and recreation.

“Moreover, the tax regime for commercial woodlands remains advantageous, with much activity effectively falling outside the scope of tax, being not subject to income tax and exempt from inheritance tax. There is also limited capital gains tax exposure, coupled with some woodland sales at a beneficial 5% chargeable VAT.

“We are currently working with a number of clients and specialist woodland and forestry advisers to see where they can not only attract the highest levels of support but also work to best effect within the current tax regime and look ahead to the potential for improved markets and returns in the future.”