Tax advice of the week: Lose the taxman in the woods

Woods provide more than an escape from modern life, says Kevin Dowling in The Sunday Times. They are also a tax-efficient investment.

Britain is one of the least wooded countries in Europe and half of its ancient woodland has been lost since the 1930s. Today, according to Forestry Commission figures, just 13% of the total UK land area is covered in trees.

But investment or leisure buyers may be able to do something to reverse that trend.

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Over the past five years the number of Britons paying up to £60,000 for small woodlands (5-25 acres) has doubled. Many buyers plant new trees, and there are "hard-headed" reasons for doing so. "The price of firewood has risen sharply and is currently around £75 a ton."

Profits from timber sales are free of income tax and there is no capital-gains tax to pay on standing or felled wood. Plus if you own your woodland for more than two years, there is no inheritance tax to pay either.

Woodlands.co.uk is one of a number of companies that specialises in the sale of small woodlands.