Forestry Taxation

Forestry Taxation

There are many tax advantages for commercial forestry owners. Investing in woodland creation can be an efficient way to manage your taxation both now and in the future.

Capital Gains Tax (CGT)

Only the increased value of land is assessed for CGT, meaning any increase in value of trees, through growth or timber price rises, are exempt from CGT. Capital improvements works, such as roads or fences, can be offset against the increased value of land.

Rollover relief is also available where CGT liability from the sale of a business asset can be rolled over  into a commercial woodland investment, which includes the creation of new woodland.

Income Tax

Timber sales from commercially managed woodlands are exempt from both income and corporation tax.

Value Added Tax (VAT)

Owners of commercial woodlands can register to reclaim VAT on expenditure. Even though commercial woodlands often have long periods where there is no taxable expenditure, HMRC usually allow registration for VAT if there is the expectation of future taxable expenditure.

Woodland Creation Scotland provide a VAT administration service to our clients as part of our comprehensive woodland management service.

Land and Business Transaction Tax (LBTT)

LBTT is applied to all Scottish non-residential property transactions, which includes woodland and land sales. The current rates are:

    • Up to £150,000                      0%
    • £150,000 to £250,000       1%
    • Over £250,000                       5%


Woodland Creation Scotland are not qualified to give taxation advice. We recommend that you consult with taxation or financial advisors to receive advise from a suitably qualified professional.


Find out more about woodland creation opportunities.

Call us on 01738 442 903 or email

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