- NO INCOME TAX
- NO CAPITAL GAINS TAX
- NO INHERITANCE TAX AFTER TWO YEARS
UK investors will receive several tax incentives should they invest in German plantation forestry. EQ chartered accounts from Scotland has made a report, which we will send to you upon request.
Income Tax & Corporation Tax
- No income or corporation tax on the occupation of, or timber income from, commercial woodlands.
- Profits from the sales of timber are tax-free, rents and other revenue receipts from woodlands are liable to income tax.
- No relief from income tax is given for expenditure incurred in commercial woodlands.
Capital Gains Tax (CGT)
- Special provision is made for commercial woodlands under the CGT legislation, for instance:
- CGT is not payable on the gain in value of standing timber, only the processed timber and the increase in value of the underlying land is assessable.
- Rollover relief is available when qualifying business assets are replaced, but this relief only applies to the land and capital works.
- Non-commercial woodlands are subject to normal CGT regulations.
Inheritance Tax (IHT)
- Commercial woodlands currently attract 100% business property relief provided the transferor has owned the “relevant business property” for a minimum of two years immediately before the transfer.
What defines “Commercial Woodlands”?
There is no definition of commercial woodlands. They are best described as woodlands that are “managed on a commercial basis with a view to the realisation of profits.” There should be evident intent to make profits – income or capital – and the usual attributes of a commercial business such as professional management, separate bank account, VAT registration, accounts, etc.