Inheritance tax – sorting out the wood from the trees
For some reason lurking in the mists of time, woodland receives favourable inheritance tax treatment. I seem to remember that Terry Wogan was a fan.
If the woodland is run as a business it should qualify for 100% business property relief. In some circumstances agricultural property relief applies, again 100%, so in either case there will be no inheritance tax.
There is also a special inheritance tax relief called “Woodlands Relief”. This applies both to commercial woodland and amenity woodlands which have been owned for more than 5 years in circumstances where business property relief or agricultural property relief does not apply. It is a deferral allowing the value of timber within the woodlands to be excluded from the estate on death. Inheritance tax will be charged when the timber is eventually disposed of based on the value of the woodland at that point.