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HMRC internal manual

Business Income Manual

Farming: Christmas trees

S996 Income Tax Act 2007, S1125 Corporation Tax Act 2010

The growing of Christmas trees is not covered by the exemption for commercial woodlands (see Jaggers v Ellis 71TC164).

Nowadays most Christmas tree production is from specialist Christmas tree producers or from farmers who grow the trees as a crop. Where Christmas trees are grown on an ordinary farm the income may be included in the farm profits. Specialist `Christmas tree farms’ are nurseries and thus fall within the statutory definition of `market gardening’.

Some poor quality Christmas trees are produced by selling the tops of felled trees from commercial woodlands or the thinnings from land being prepared for forestry. In those cases the profits are covered by the woodlands exemption. The Forestry Commission does not give grants under the Woodland Grant Scheme (WGS) to Christmas tree plantations. If the taxpayer has received WGS grants in respect of the land concerned then it is likely that the woodlands exemption will apply but ultimately it will always be a question to be decided on all the facts of the case concerned.