The past few years have seen a surge of people investing in woodland in the United Kingdom. But what can be attributed to this recent popularity in woodlands? What do these investors know that others do not? Does money really grow on trees?
There’s a fair bit of romanticism attached to owning a little woodland to call your own, conjuring up mental images of a picturesque, little fairytale forest. You yourself may have in mind a woodland refuge of your very own to explore and enjoy at your leisure, in the comfort of knowing that every tree and shrub is yours. Alternatively, the appeal of owning woodland for you may solely lie in the commercial benefits.
Unlike many other forms of investment, there is something quite attractive about being able to physically touch the trees and appreciate their natural beauty, safe in the knowledge that these trees can generate income for years to come. As a renewable commodity, not only can the trees potentially bring decades of value, they are also something that may eventually increase in value. But, of course, if you’re looking for any sort of monetary return on your investment then you will need to take the time to carefully consider the location of your woodland plot and the age and type of cash crops planted. For others, the enjoyment of owning their very own woodland is return enough.
More small woodlands (5 to 15 acres) now are being purchased by families thanks to their great value for money, and low price tags of around £10,000 per acre (with no stamp duty on woodland purchases below £150,000). Of course for larger woodlands the price per acre can be a lot lower, but for most families five acres is plenty for woodland activities. Lots of space to explore the natural surroundings, learn traditional skills such as wood crafts and carpentry, camp overnight in the warmer seasons, host parties and picnics and all sorts of outdoor adventures. And when the time comes, you can pass on your children’s childhood sanctuary for them to care for (or even sell!) when they are older. Woodland prices have risen dramatically over the past few years, but it is important to remember that woodland is a long-term investment.
One of the perks of owning UK woodland is the Inheritance Tax relief. To qualify, you must have owned the woodland for a minimum of only two years and have run it as a business.
You’ll also be happy to know that any income made from the sale of timber is tax-free, whether you’re a company or an individual! Small woodland owners who sporadically like to chop down their trees to sell the timber can also enjoy the same tax breaks as commercial forests. And by planting new trees in their place, these benefits can be enjoyed for generations of trees to come. To qualify for the tax break, the woodland must be “managed on a commercial basis and with a view to the realisation of profits”, but families can still “manage” their small woodlands commercially while still reaping the family leisure benefits of owning a part of the great British countryside. Though you do need to be licensed to cut down any trees. And before you decide to rent your woodland out for camping or sporting activities, this is taxable.
Can you build on your woodland?
This is the bit where most people go from being doe-eyed and intrigued to thoroughly disappointed. It is immensely difficult to get planning permit to build on your woodland. Just consider it near impossible. So there goes any dream of an elaborate multi-storey treehouse tucked away in your private woods…
But you can build things like storage sheds, toilet facilities, shelters and any construction that serves a “forestry” purpose (which seems something they’re quite lenient on, so long as it’s reasonable). Though you are still required to notify the local authority before any such work is started.
You can also camp or park a caravan in your woods for up to 28 days a year. Not to mention tents. So as long as there is no dwelling built, or anything that resembles a dwelling, you can still take short overnight camping trips to your woodland.
If you are thinking of investing in UK woodland, you might want to consider woodland insurance. Woodland insurance cover starts at only £145 per annum for up to 50 acres of woodland, and can cover you against accidents like damage to cars or injury to a member of the public caused by a falling branch – the most common type of insurance claim. Apart from that, the only other annual charges are optional things like drainage and maintenance. Maintenance can work out to be up to £5000 a year, but if you manage the land yourself as a hobby and are willing to invest a little time as well as money into your woodland, then owning a woodland can work out to be a great investment that brings years of pleasure.