This month will see the closure for applications of both the Environmental Farming Scheme (EFS) and the Forestry Expansion Scheme (FES).
The key dates are: EFS close of application: September 21st; FES: September 28th.
Both measures have the potential to significantly increase the level of tree cover in Northern Ireland. The good news is that forestry and woodland development remain extremely attractive investment options for farmers here in Northern Ireland.
UK timber prices continue to strengthen with returns fast approaching those already available in mainland Europe. This trend reflects the many uses to which forestry products can now be put.
As a consequence, demand for land with established plantations in situ has never been higher. Also driving the market in this regard is the increasing complexity associated with the establishment of new private sector woodlands. In simple terms, it is more attractive to invest in a forestry enterprise that is already established than to start from scratch.
Across in GB, the market is largely focussed towards the sale of plantations which extend to 100 acres plus. However, there is growing recognition that much smaller scale enterprises, of the type more commonly found in Northern Ireland, are becoming of interest to investors. The criteria to be met include a well-managed site with good access. In such circumstances commercial woodlands down to c 10 acres in size could soon become attractive to buyers.
To make this happen we need a willingness on the part of both Forest Service and the Department of Agriculture, Environment and Rural Development to make both schemes reach their full potential. There is significant funding available for both measures. It makes total sense that these monies should be fully allocated. This has not been the case in the past.
One key benefit of the September closing dates for both FES and EFS is that it will give both agencies the opportunity to green light viable projects that can then be fully developed within the 2018/19 tree planting season. Adding to the growing interest in forestry development is the fact that increasing numbers of landowners now realise that they can utilise a commitment to forestry development as a means of reducing their exposure to Inheritance Tax (IHT). This is a crucial component of the succession planning procedures that should be put in place within a family farm business.
Following two years of ownership, commercial woodlands can attract 100% Agricultural Business Property Relief, thus removing them completely from any charge to IHT. Please take tax advice from a competent source.
The main way to mitigate IHT is to make sure that the woodland qualifies as a business asset. But this will only be achieved if the forest, or woodland, is commercial in nature and professionally managed, and recognised as such by HMRC. Premier Woodlands’ staff have been specifically trained to provide the professional input required, where this matter is concerned.
Meanwhile, approval under FES means that all establishment costs will be grant aided, while also providing annual payments on the land planted out for a period of 10 years. It all adds up to a win/win scenario for the landowners involved.
Underpinning all of this is the development of a fit-for-purpose woodland development plan. And, again the team at Premier Woodlands will provide clients with a bespoke service in this regard.
Another date worth keeping in mind is September 14th. This represents the cut-off for expressions of interest to be declared in securing one of the most attractive forestry development opportunities ever to come on the market in Northern Ireland.
Extending to c 100 acres of land that was planted out in mainly conifers and some broadleaves 20 years ago, the forest is located on the outskirts of Pomeroy in Co Tyrone. Premier Woodlands is managing the sale of this uniquely valuable asset. One of the site’s main attractions is the fact that it is one block, bounded by two public roads. It has also huge capital growth potential while also offering all of the tax advantage associated with a forestry investment of any kind.
In addition, the forest has met all its growth targets since its establishment in 1999. It was developed to deliver a 30-35 year crop rotation, where timber sales are concerned. And the site is fully on track to deliver on this target.
For further information, contact Premier Woodlands on (028) 7963 4236.