Properties Invest Abroad

Eco-Friendly Investment

Why choose tropical hardwood trees as an investment?

Tropical hardwoods offer a high return on investment because there is a huge demand. World consumption has multiplied nearly 25 times in the last 4 decades and more than 100 billion board feet of tropical hardwoods are now being consumed each year. The investor buys trees and leases part of a tree plantation for which they hold the leasehold title to the land. The forestry management company will contact the investor several months prior to their trees reaching maturity so that the investor can decide at what point they wish to harvest their trees and sell the timber. The investor receives the profit of the value of the timber from their trees. The trees’ growth period to maturity varies between 6 to 18 years depending on the species. The trees that are harvested will be replaced by new ones on the same land so creating sustainable forests for generations to come.

Forestry investment is an accepted asset class and proven means by which institutions and private individuals can seek returns on their investments.

Teak is an ideal species for plantations because it grows relatively quickly and with demand out-stripping supply prices will continue to rise.”

When the investor purchases, their trees the saplings are planted and nurtured by expert foresters who will also provide the investor with an annual report detailing the conditions of their trees and explaining the options as appropriate.

These are various tax incentives in the UK for individual investors in forestry.

Capital Gains Tax
The increase in the value of timber is exempt from capital gains tax. Increases in the net value of land is assessable but land value currently accounts for only around 15 % of the value of mature woodland.

Income Tax
Income accrued from a timber crop is exempt from income and corporation tax. Sri Lanka does not impose income tax on returns from timber.

Inheritance Tax
Timber qualifies for 100% business property relief if it has been held for two years prior to the death of the investor so no inheritance tax is payable. Lifetime transfers , which are often called Potentially Exempt Transfers, will not attract an immediate tax charge but this could change if the original investor dies within 7 years of making the transfer.

Capital Gains Tax Rollover Relief
Forestry investment is a qualifying asset for capital gains tax roll-over relief. This means that any capital gains tax liability on the sale of a business asset can be deferred by investing in forestry assets and will be deferred permanently if the forest investment is held until death.
If the investor gifts forestry assets during their lifetime it is possible for the beneficiary to qualify for hold-over relief from any capital gains tax on the land element of the gift. The timber value of the gift is exempt from Capital Gains Tax anyway.

Projected Returns

All of our projected returns are based on a very cautious 6%, however last year teak delivered a return of 16.4%

THE INVESTMENT - How it works
The minimum investment is £10,000 and the amount of trees varies according to the species selected. For instance £10,000 buys 300 teak trees or 350 agarwood trees. When the investor purchases their trees the saplings are planted and nurtured by expert foresters who will also provide the investor with an annual report detailing the conditions of their trees and explaining the options as appropriate. For instance teak trees need thinning to make more room for the stronger trees; the harvested timber from the thinning will be sold and the investor receives a payment at years 4/5 and every 3 years until the final harvest. The investor can choose to sell their investment at any time and will receive the current market value of the trees according to an independent valuation of the timber.

For full comprehensive details of this fantastic investment opportunity simply fill the email enquiry box on our homepage and we will email you our informative pdf brochure.