When is a wood a wood and a forest a forest?

[James M]

Found this :

http://www.hmrc.gov.uk/manuals/bimmanual/BIM67701.htm

"The term ’woodlands' is not defined by the statute and takes its ordinary meaning. It does not include orchards or nurseries where trees (including Christmas trees) are grown for sale or coppices where trees are harvested repeatedly every few years."

As the Queen owns it all anyway I'll take her word for it. She still hasn't turned up to sort those rabbits out with her air rifle.

[WickedWitch]

What a shock! I had a look at the site James M refers to, and it seems to be true. In the eyes of the Inland Revenue, coppice woodland does not qualify for tax exemption as other woods do. So income from the sale of coppice poles is taxable? And coppice woodlands, not matter how commercially managed, are still subject to inheritance tax? Tell me I'm wrong- please!

[Kentish Man]

This may (or may not!) enlighten you a bit more: http://www.woodlands.co.uk/blog/practical-guides/woodlands-and-taxation/ - one poster says that standard cut timber is exempt, but anything with added value (even sharpening a post) can make the income taxable.

Not sure about the coppice part of your question though...

[tracy]

I think the key sentence is 'short rotation coppice'... but what is that?

Having done a google search I came across this:

Taxation of woodlands and forestry.

http://www.tax.org.uk/attach.pl/2540/1613/TA_020,021_0604.PDF

I think it spells it out pretty clearly, but I don't understand a word! Perhaps someone else can read and decipher?

[Kentish Man]

That document says to me, at least, that 'short rotation coppice' is taxable. The 'short rotation' term is defined as under 10 years.

The rest, however, to me, is clear as mud! Too many acronyms for someone who doesn't fill out a self-assessment tax form.

Also worth bearing in mind is that the document dates from June 2004, so may be out of date? I thought I read somewhere once that timber was treated differently to coppice for tax purposes and the article specifically says (misleadingly, IMO) that short rotation coppice = the quick production of timber. Leaving aside that a minimum of 10-12 years for the quickest-growing trees, is hardly quick in economic terms, I don't think much in the way of "timber" would be produced by short rotation coppice, would it?

Oh god, I've just realised that this leads to another one of my "simple" questions - how do you define 'timber' - for tax purposes - and if you like, for fun, in woodlands-owner speak?! [sorry!].

[DaveTaz]

Short rotation coppice also covers those "crops" used for bio-fuels etc. I always assumed that's why it is taxable as it is classed as agriculture. It is classed as agriculture so that farmers wishing to diversify don't need to get "change of use" planning consent ...... but i may be wrong!