Forestry Acquisition Services
An investment in forestry is perhaps a little out of the norm compared with traditional stocks, shares and bonds. However, the prospects for steady, long-term growth are excellent, the tax benefits are clear and the additional advantage of enjoying the investment is also apparent.
Fountains Forestry can advise on forestry investment including portfolio management, market evaluation and assessment and valuation of forestry assets, producing cash flows in order to assess the rate of return. Whatever the size of your holding our role is the same: to maximise the asset value of your property through our knowledge and expertise within the industry. Forestry as an asset class offers the following benefits to investors:
Low Risk and Diversification
Forestry investments are considered to be low risk, as the growth is in part biological, to perform countercyclically to equities and to be less volatile than bonds. These characteristics gives the forestry asset class an important diversifying and risk-hedging quality that can be exploited in multi-asset portfolios.
Taxation
- Inheritance Tax: UK forestry investments qualify for relief from inheritance tax after two years of ownership
- Capital Gains Tax: capital gains tax is only payable on land value increases
- Income Tax: no UK income tax or corporation tax is payable on timber sales
Some of these benefits can also be obtained from investment in overseas forestry.
Typical Returns
Over a three-year annualised basis to end of 2008, forestry investment outperformed the three main asset classes (equities gilts, commercial property and bonds), returning 19.3% per annum, while long-term performance delivered a 5.2% return per annum in the sixteen years from 1992 to 2008 (IPD UK Forestry Index 2009). This compares favourably with shares, given the associated tax advantages.
Timber Prices
Timber prices are a major driver of forestry returns. Domestic and international demand for timber remains strong both from traditional uses and, more recently, to supply the energy market. Due to these buoyant markets, forestry owners are able to achieve competitive prices for their timber.
As Fountains Forestry remains independent of the timber processing sector, we are able to act in our clients' best interests and obtain the best price for their harvests.
Environmental Benefits
Against a background of increasing concern over environmental issues, forestry remains a socially responsible investment. In addition to combating the acknowledged main source of global warming by sequestering carbon dioxide , investors are able to produce a broad range of environmental benefits such as creating sustainable fuel sources and fostering biodiversity.
Call: 01295 753233
for forest and land management, acquisition and brokerage services and environmental consultancy.
