TIMBERLAND FORESTRY

    Income from Forestry is Tax Free

Profits, including grants and premium payments, from forestry managed on a commercial basis and with a view to the realisation of profits are exempt from income and corporation tax.

    Finance Bill 2003

A requirement is being introduced that the profits or gains arising from forestry must be included in the annual return of income even though the income or gains are exempt from tax. This new requirement will apply in respect of chargeable periods commencing on or after 1 January 2004. The same applies to stallion and greyhound stud services.

   Agricultural Relief

Gifts or inheritances of woodland in Ireland can quailfy for Agricultural Relief in relation to Capital Acquisitions Tax (CAT). An allowance of 90% of the value of the crop is allowed for CAT purposes

The recipient does not need to be able to show, after taking the benefit, that at least 80% of his or her total assets are represented by agricultural assets.

   Capital Gains Tax

Where an individual (but not a company) disposes of woodlands, the value of trees growing on the land is disregarded for Capital Gains Tax (CGT). This means that only the actual bare land itself is taken into account for CGT purposes.

   Stamp Duty

The value of growing trees is disregarded for stamp duty purposes on a conveyance or transfer of forestry land by sale or lease, stamp duty is charged only on the value of the bare land.

    Professional Advice

The above information is only intended as a guide, you are advised to seek Professional legal and tax advice before making any decision.