Ireland is committed to a favourable tax regime towards forestry – Section 232 of the Taxes Consolidation Act, 1997 states that:
“The profits or gains arising from the occupation of woodlands managed on a commercial basis and with a view to the realisation of profits shall not be taken into account for any purpose of the Income Tax Acts”
Income from forestry grants, forest premiums and timber sales are exempt from income tax.
Capital Gains Tax
Commercial woodlands occupied by individuals are exempt from capital gains tax on the growing timber. In the case of sale of the forest lands, Capital Gains tax is only applicable on the land, subject to the surplus over inflation adjusted cost.
The transfer of forest land between spouses and group related companies are exempt from stamp duty. There are reductions for transfers between certain family members and young trained farmers. Growing timber in your forest is also exempt from stamp duty upon sale, but the underlying land is not (unless spouse or group related company).
Capital Acquisitions Tax (CAT)
Sale of trees is exempt from CAT but the sale of land as for farmland is subject to CAT.
Trees growing on land qualifies as agricultural property, agricultural property qualifies fro agricultural relief (90% flat rate relief for both gifts and inheritance)
All gifts and inheritance between husband and wife are automatically exempt.
There is a parent to child exemption up to €225,000 and the rate of tax thereafter 33%.
Please note the information above is subject to change so please check with your Tax Advisor.