Investing in Foresty 🌲

Anybody invest in Forestry? In Ireland it’s tax-free for both personal and corporate tax (not sure about UK) I’m looking for a P2P type platform that allows you to invest in “projects”. In Ireland we have 20% Closed Company Surcharge for undistributed profits after 18 months so I’m looking to see can I offset that by investing in forestry. Don’t expect an answer on the surcharge but thought I’d throw it out

The reason it’s tax-free is the EU have set a target for a certain % of countries to be forest

How does one invest in forestry, either in the UK or Ireland? Is it actually for reforestation, or to grow forests to then harvest for timber?

I’ve mostly seen reforestation as charity work or rich land owner stuff (e.g. the Danish man buying up much of Scotland to re-wild it).

I think it’s a bit of both @john . I think the end goal is eventually reforestation but there’s definitely investments for timber in the sector. I’ve invested in a P2P investment on Crowdestor that is forestry but I will have to seek tax advice on wether this is tax-free in this instance.

The current tax benefits in UK are pretty good (from memory so don’t rely on this!):

  • no corp tax or income tax on income!
  • no inheritance tax on value of timber or land if it’s a business asset (commercially managed timber)
  • no cap gains tax on value of timber (though not land)
  • cap gains rollover relief (can errr “timberwash” a cap gain by putting the proceeds into a timber business)

Here in Scotland there are also decent grants to create and manage forests. It’s pretty tempting! On the other hand it sounds like it’s a load of work, and 25-40 years before you can harvest your crop.

So one way that’s easier than becoming a forester would be to buy a timber etf, eg https://etfdb.com/etf/WOOD/ (which I think is on LSE) or https://etfdb.com/etf/CUT/ (which I think isn’t).

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@rod Post saved! ETF sounds very interesting thanks for posting

I’d guess that the NY version of the same etf would have lower expenses though :roll_eyes:

Very confused… on DeGiro it’s a totally different price that the website you posted is. I can’t find the ISIN on that website you provided. Also how much of said ETF can you consider true forestry that would be considered tax-free.

I’d have a hard time convincing revenue it’s all forestry, even with the 4.5% exposure to Ireland

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I wonder if the investor going via an etf has less access to the tax breaks that the forester has, dunno. Or that it would need some chunky accountant time to persuade the tax man.

ETFs in Forestry will not offer the tax benefits (MoneyWeek).

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Interesting reading @Stevo thanks

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In Ireland it does :stuck_out_tongue_winking_eye: