NOTICE (issued by Forest Service February 2010):
Tax Clearance Certificates are required for all forest owners in receipt
of annual forestry premium payments exceeding €10,000. Tax clearance
certificates should be forwarded to the Forest Service, Johnstown Castle
Estate, Co. Wexford. Certificates are also required for grants.
Profits or gains, including premium income, arising from the occupation
(having the use) of woodlands in the State are normally not taken into
account for the purpose of the Tax Acts*, provided that woodlands are
managed on a commercial basis and with a view to the realisation of profits.
[S.232 Taxes Consolidation Act, 1997].
income levy which came into effect on 1 January, 2009 is generally applicable
to income from woodlands in the hands of individuals.
Income Levy below.
introduced in Section 17 of the 2006 Finance Act, and modified in the
2007 Finance Act, and being further modified improved the 2010 Finance
Act, limit the amount of reliefs, including woodland exemptions, used
by certain high income individuals. These are deemed to be those with
income of €125,000 or more annually from all sources and also having
specified reliefs (such as capital allowances) and exempted income, such
as profits from woodlands, of €80,000 or more. This could give rise
to additional tax in some circumstances even where woodland profits are
less than the threshold of €80,000. In all cases where the woodland
profits for an individual exceed €125,000 in a year a tax charge
could arise so even an average sized clearfell needs to be planned not
just to maximise return but also to eliminate or minimise tax. Owners
are advised to keep accounts of costs and expenses every year and
to discuss the implications with Woodland from whom a more detailed note
is available. Contact John Phelan
Social Welfare (Miscellaneous Provisions) Act 2008 (S. 8) which came into
effect on 1 January 2010 provides that income from dividends arising from
stallion fees, stud greyhound fees and profits from the occupation of
certain woodlands will be taken into account in estimating reckonable
income for PRSI purposes.
is no Capital Gains Tax (CGT) on trees
Capital Gains arising on the sale of woods are exempt from CGT in
the hands of the individual. Any gain attributable to the land is included
in the computation of CGT; indexation relief may eliminate any chargeable
gain. [S. 564 Taxes Consolidation Act, 1997]
Acquisitions Tax - significant relief
Gifts or inheritances
of woodlands within the Republic of Ireland can qualify for Agricultural
Relief under CAT. This is a complex area of taxation requiring careful
assessment of individual circumstances.
Added Tax (VAT) may be reclaimable
Forestry, for VAT purposes, is similar to farming activities. Non registered
farmers may, in some cases, be able to claim VAT on expenditure on ground
preparation and fencing. Claims by Unregistered Farmers for Refund of
Value Added Tax should be sent to: Revenue Commissioners, River House,
3rd Floor, Charlottes Quay, Limerick (Lo-Call 1890 252449) or look up
the Revenue website [Value
Added Tax (Refund of Tax) (No. 25) Order, 1993]
The 1990 Finance Act exempted from stamp duty the value attributable to
growing trees, managed commercially, on conveyances or transfers of forestry
land by sale or lease. Conditions apply.
The Local Government (Charges) Act, 2009 was signed into law in July 2009.
introduced a €200 charge applicable to any residential property which
is not the principle private residence of the owner, with certain exemptions.
2009, the charge applied to properties owned on 31 July, 2009 and payment
was due by 30 September, 2009. The €200 charge is not deductable
when calculating taxable income.
is unlikely that any forest property will have a chargeable residential
property but if there is any doubt whatsoever e.g. where a farm was purchased
with the intention of selling off a residential property but that residential
property remained in ownership on 31 July advice should be taken from
your tax advisor as to whether a liability might exist.
the Act a residential property means a building suitable for use as a
dwelling and a dwelling includes a building used, or suitable for use,
by an individual as a seperate dwelling.
Profits from the occupation
of woodlands managed on a commercial basis with a view to profit are taken
into account when estimating reckonable income for PRSI purposes the relevant
Section 8 of the Social Welfare (Miscellaneous Provisions) Act 2008 came
into effect on 1 January 2010). This overwrites the provisions of Section
140, TCA 1997
Levy - Individuals
An Income Levy of 1% (2% on income over €100,100 per annum up to
€250,120, 3% on income in excess of €250,120) came into effect
on 1 January, 2009. It will apply, if the individual's gross income exceeds
€18,304 p.a. or €20,000 for an individual aged 65 or over, to
income, including premium income, from the occupation of certain woodlands.
Gross income is determined after the deduction of legitimate expenses
directly associated with the performance of the business in accordance
with, according to Revenue guidance, the normal principles of commercial
accounting. There are some exemptions. The
onus is on the owner to make a payment of income levy along with preliminary
can guide you on forestry taxation matters. As individual circumstances
can affect your tax position, we recommend that you refer to your tax
advisor, if in doubt, before finalising an investment or disposal or family
> Incentives > Taxation
Merchants Dock, Merchants
Road, Galway, Ireland
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