Woodland Purchases Encouraged By The Government With An Extra £600,000 Tax Boost

The Government's U-turn on Agricultural Property Relief means that woodland buyers may save up to £600,000 extra in tax relief. The inheritance tax free band for a couple owning commercial woodland has been increased from £2 million to £5 million. Following sustained pressure from the farming and rural business community, ministers have announced that the threshold for full 100% relief under Business Property Relief (BPR) and Agricultural Property Relief (APR) will rise from £1m to £2.5m per individual from April 2026, with reliefs transferable between spouses.

This change to inheritance tax relief on commercially managed woodlands has made it easier for couples to protect their assets from inheritance tax (IHT). Increasing the allowances available to individuals and couples seeking to benefit from favourable tax treatment of woodland ownership will help ensure the future of Family Forestry, enabling the transfer of woodlands between generations.

“Woodland ownership has long been compelling on environmental and lifestyle grounds. This reform, announced via the Christmas U-turn, reinforces the position of woodland and forestry as a serious long-term asset that can benefit from material IHT relief", says Legacy Forestry’s National Manager Dan Sharp.

Legacy Forestry continues to be uniquely placed in offering appropriately sized commercial woodlands to individuals and couples seeking to benefit from the current UK inheritance tax regime.