When you think about commercial forestry, I bet the first image that comes into your mind is rows of uniform conifers on a norther hillside. I suspect very few of you thought instantly of triangular sandwiches, jammy scones and a sunny English summers day. But with many estates and landowners looking to diversity, perhaps this is exactly what you should be looking into.
Now before you get excited, I am not suggesting you run off and build a tea room (but if you do, make sure the cake is good and we will come and test it for you!) I am suggesting you consider the benefits of growing cricket bat willows. This quintessentially English forestry crop can make the ideal addition to the wetter area of your estate, with benefits for your wider estate diversification and some handy tax benefits!
Growing the willow
Cricket bat willows are best suited to growing in wet, low lying grasslands near streams and rivers or with a naturally high water table. They are planted at a spacing on 10m x 10m which allows plenty of room for grazing underneath and require regular, but not difficult maintenance. Trees must have the buds rubbed of the bark and any lower side shoots removes a couple of times a year until a smooth stem over 3.6m high is produced. These trees then have a market value of £800/tree for good stems which equates to £80,000 / ha. This is a fantastic return on often marginal land. And even better it's TAX FREE!!
Tax benefits
As with all commercial forestry, there are some great tax incentives for growing cricket bat willows. Firstly, the income you generate from the timber sales is tax free. This is of particular benefit to any higher rate taxpayers amongst you.
As well as not paying income tax on the final profits, you are also not liable for any capital gains tax on the trees themselves as they grow and increase in value. If the land is sole therefore, the increase in value of the trees over time is not taken into account for Capital Gains tax calculations, only any increase in value of the land itself.
Thirdly, should the worst happen and Inheritance tax becomes a consideration, then commercial forestry including both the land and the trees attracts a Business Property Relief of 100% once it has been owned for two years. So
And lasty, should you be registered for VAT the. You could reclaim tat vat on your capital expenditures for planting, fencing and maintaining the area.
Contact us
If this is something you might be interested in, then please do get in touch and we would be happy to come and discuss options with you. Before you know if, your village cricket team could well have the best ‘on drive’ in the county thanks to your willows. Not to mention the best cream teas!
Joe Court forestry are not qualified to give taxation advice and strongly recommend you speak to your own independent taxation advisor.
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