Commercial Property specialist Caroline Entwistle considers the reasons why buying woodland can prove attractive.
Caroline is available on 01225 462871 or by submitting the Contact Form below.
Signs advertising “Woodland for Sale” are not uncommon these days, most erected by specialist agents. But why buy woodland?
Our native woodlands are among our most precious resources and home to some of our rarest flora and fauna. Contributing to its preservation while enjoying life outdoors is infinitely rewarding. But it’s not only about altruism, exercise, and good karma; as you will see below, there are potential financial benefits.
Can I live in woodland I own?
Living in your own woodland seems like the ultimate return to nature. But expect a rude awakening if that’s your objective. Getting planning permission for any form of dwelling in woodland is extremely rare. Indeed, a memorable episode of Grand Designs some twenty years ago featured the only successful application in half a century. And in that case, the permission came with formidable conditions, including a requirement to demolish the house should the owner ever sell the wood or his coppicing and charcoal business.
Can I camp in my woodland?
If you cannot live in your woodland, what about camping?
Legally, “[t]he use of any land for any purpose for not more than 28 days in total in any calendar year” is classed as permitted development. While there are a couple of exceptions, camping is undoubtedly allowed. Indeed, during 2020 and 2021, the government temporarily doubled the time limit to 56 days to allow greater use of temporary campsites as people scrambled for domestic getaways following lockdown.
Financial benefits of owning woodland
Although the distinction is not always clear, broadly, there are two types of woodland: commercial and amenity. While amenity woodland is used primarily for conservation and leisure, commercial woodland is actively managed for timber production. Enterprises sometimes involve ancient and highly sustainable activities such as coppicing and charcoal burning. Commercial woodland is also often used for leisure pursuits such as paintballing, bushcraft and similar courses.
Not only has the value of woodland proved far less volatile over the years than many more traditional investments, but it’s also among the most tax-efficient forms of property speculation. For example:
- After two years of ownership, woodland is exempt from Inheritance Tax (IHT) (that includes the value of the land and the standing timber).
- The increasing value of timber is free from Capital Gains Tax (CGT). And although increases in the value of the land itself are subject to CGT, they may qualify for holdover, rollover, or business asset disposal relief.
- Income from the sale of timber is tax-free.
VAT on timber
If you are marketing your timber as firewood and selling directly to the consumer, it’s eligible for a reduced VAT rate of 5%. However, other timber sales, including Christmas trees, are subject to the full VAT rate of 20%.
Stamp Duty on woodland
There’s no Stamp Duty Land Tax (SDLT) payable on the purchase of woodland up to a value of £150,000.
How to buy woodland
The conveyancing process of buying woodland is essentially the same as for buying any other type of property. So, your solicitor will conduct searches and other pre-contract enquiries, followed by exchange of contracts (with payment of a deposit) and, ultimately, completion.