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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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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.