Forestry Investment

Forestry appeals to many individuals; the UK has an active woodland sales market and RTS Forestry can help you buy the right property at the right price for the right reasons. Investors can purchase established woodland, or buy farmland and create their own woodland. 

• Strong recent investment performance (greater than 10%/annum over the last 10 or so years – IPD Forestry index, John Clegg Forest Market Report).
• Rising demand for wood worldwide (threefold by 2050 WWF).
• Increasing value of natural capital associated with woodlands such as carbon, biodiversity, flood alleviation. 
• Investment driven by biological growth which is uncoupled from wider economic trends i.e. the trees keep growing even if the economy is contracting.
• Hedge against inflation
• Positive tax treatment
• Active market giving relative ease of exiting the investment at chosen time
• Wide range of forestry management service providers

For investors with commercial objectives we generally suggest a minimum purchase of £200,000 to get sufficient scale economies. 

It is critical that clients are clear on their investment objectives. At RTS Forestry we take time to establish these and make sure the right property is bought. For example, some investors are looking only for capital growth, and they might choose a young woodland or a new woodland planting scheme. Other investors may want a steady income flow and for them an older, or multi-aged woodland, with regular timber harvesting would be suitable. Wherever possible we visit sites with investors so we can discuss the pros and cons on the ground. 

• Commercial forestry is effectively outside the tax system:
• There is no income tax on timber sales, but no tax relief on expenditure.
• Forestry planting grants and carbon payments are tax free.
• There is no capital gains tax on the growing timber crop.
• The entire value of commercial woodland attracts Business Property Relief at 100%, thus avoiding Inheritance tax.
• Woodland owners can register for VAT and reclaim the tax on expenditure. 
• Note: RTS Forestry is not a tax advisor and clients should take advice from a qualified individual.

We offer a full acquisition service for woodland buyers. This includes:

• Monitoring the market to capture data to give good comparable evidence on prices.
• Site assessment, timber measurement and modelling
• Production of cashflows and investment appraisal
• Valuation of the woodland and recommendations on bidding tactics. 
• Assisting lawyers in preparing bids and offering forestry advice during the purchase.

We charge an acquisition fee with the percentage dependent on the scale of the bid. This will typically be in the range of 1-2%. 

RTS Forestry provide a full forest management service to woodland owners. 

The RTS Forestry Investment team are led by Managing Director Norman O'Neill