Forestry Investment Benefits

Annual Tax Free Income

Farm forestry will generate a tax free income which is paid annually.

The premium rates will depend on the species planted and classification of land.

This annual tax free premium is payable for a period of 20 years.

Generous Grants mean no capital Investment

In addition, to the annual income scheme, forestry is substantially grant aided. In most cases the planting grant covers all the establishment costs thus reducing the overall capital requirements to run your farm.

Grants are payable in two installments.

Three quarters of the grant is payable on planting and the balance is payable after four years following inspection and approval by the Forest Service

Tax Free Capital Growth

One acre of forest will appreciate in value annually at an average rate of €130 per acre, tax free.

By the time the forest reaches 15 years maturity your thinnings will be ready for use as fencing stakes, chipboard, rustic fencing or firewood.

From year 15 onwards the thinnings become more valuable and the uses for your timber become more variable as your trees mature.

A well managed crop of Sitka Spruce should be ready for clearfell after 30-35 years, depending on the site, and at today's prices should yield a return of over €7,618 per acre (excluding the land).

Longer term broadleaves should yield considerably more.

Exemption from income tax, capital gains tax and stamp duty

With our current rate of taxation forestry represents a massive tax saving opportunity for farmers both full time and part time.

Income tax and Corporation tax

Profits arising to an individual or company from the occupation of forests managed on a commercial basis are exempt from tax.

Capital Gains Tax

When a forest is sold the amount received for the trees growing on the land is excluded from any chargeable gain arising.

Capital Acquisitions Tax

There is considerable scope for the tax free transfer of forestry wealth. Woodlands are valued at only 10% of market value for capital acquisitions tax purposes when taken as a gift or inheritance.

It is not necessary for the beneficiary to be a farmer in order to claim this relief.