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 Act 2006, Section 17

This limits the "specified reliefs" where total adjusted income of an individual exceeds €250,000.The Threshold Amount that applied for the tax years 2007, 2008 and 2009 was, in general, €250,000. Section 23 of the Finance Act 2010 has made significant changes to the application and operation of the restriction for the tax year 2010 and subsequent years. See www.revenue.ie for more information and get Professional Advice.

   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.

   PRSI

Income from commercial woodlands including Forest Premium payments are included as income for PRSI.

   Income Levy (2008)

Income from commercial woodlands including Forest Premium payments are included are included for the purposed of this levy.

    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.