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HMRC internal manual

Business Income Manual

Woodlands

S11, S267, S768 Income Tax (Trading and Other Income) Act 2005, S37, S208, S980 Corporation Tax Act 2009

The occupation of woodlands managed on a commercial basis and with a view to the realisation of profits is wholly outside the scope of Income Tax and Corporation Tax. Thus:

  • profits arising from the occupation of commercial woodlands are not chargeable;
  • no relief is available for losses suffered;
  • capital allowances cannot be claimed on capital expenditure incurred on plant or machinery connected with commercial woodlands;
  • no relief is available for expenditure incurred on the preliminary clearance of woodland or other preparation of land for forestry purposes.

The owner of a commercial woodland who lets it in return for a rent is, however, chargeable on the profits arising from a property business.

Profits from the sale of trees in commercial woodlands are exempt from Capital Gains Tax, see CG73200 onwards.