View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
May 6, 2025

Eight reasons to invest in forestry

Branching out: from flexibility to CGT and IHT relief, there are eight very good reasons to invest in forestry

By Anthony Crosbie Dawson

1. Strong annual returns

A £250,000 forestry investment provides an 8 per cent post-tax IRR over ten years – far better than AIM investments, equities and fixed income. Gresham House’s UK forestry funds have delivered an average annual return of over 11 per cent, net of fees and costs.

    2. Low volatility

    Between 1986 and 2022, US equities exhibited a volatility of 17 per cent, compared with just 10 per cent for forestry, despite similar growth rates.

    [See also: So, you’re going to be rich, what do you do now? Experts on how to handle a liquidity event]

    Select and enter your email address The short, sharp email newsletter from Spear’s
    • Business owner/co-owner
    • CEO
    • COO
    • CFO
    • CTO
    • Chairperson
    • Non-Exec Director
    • Other C-Suite
    • Managing Director
    • President/Partner
    • Senior Executive/SVP or Corporate VP or equivalent
    • Director or equivalent
    • Group or Senior Manager
    • Head of Department/Function
    • Manager
    • Non-manager
    • Retired
    • Other
    Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.

    3. IHT exemption

    From April 2026, the first £1 million of qualifying business assets per person remains exempt from IHT, while amounts above the threshold receive 50 per cent relief, effectively reducing the rate of IHT to 20 per cent.

    [See also: Billionaire insurance tycoon and philanthropist Robert Rosenkranz on his life, career and new book ‘The Stoic Capitalist’]

    4. CGT relief

    Around 70 per cent of a forest’s total value at maturity is in the timber, which remains CGT-exempt. Also, commercial woodland operations are not subject to income or corporation tax.

    5. A forest is a hedge!

    Forestry serves as a defensive asset, as timber prices tend to rise with inflation, making forestry an effective inflation hedge.

    Content from our partners
    How Guernsey’s private trustee structures can protect assets 
    Luštica Bay: The Adriatic's most coveted address
    AI, growth and public policy: What is the future for Britain?

    6. It’s a flexible friend

    The UK’s dominant commercial tree, the Sitka spruce, takes 35–50 years to mature, with a 15-year timber harvesting window. The ability to postpone harvesting allows investors to time their timber sales based on market conditions.

    [See also: How high earners can reduce their UK tax bill in 2025]

    7. The future looks verdant

    The long-term outlook for timber demand is positive. If the government is to achieve its aim of delivering 1.5 million homes this Parliament, increasing the production and use of homegrown timber will be essential.

    8. It helps the planet

    Growing trees remains the most cost-effective means of sequestering carbon globally, and forestry is increasingly being considered as an important natural capital allocation.

    This article first appeared in Spear’s Magazine Issue 95. Click here to subscribe

    / Image: Jon Enoch
    Issue 95 / Image: Jon Enoch

    Select and enter your email address The short, sharp email newsletter from Spear’s
    • Business owner/co-owner
    • CEO
    • COO
    • CFO
    • CTO
    • Chairperson
    • Non-Exec Director
    • Other C-Suite
    • Managing Director
    • President/Partner
    • Senior Executive/SVP or Corporate VP or equivalent
    • Director or equivalent
    • Group or Senior Manager
    • Head of Department/Function
    • Manager
    • Non-manager
    • Retired
    • Other
    Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
    Thank you

    Thanks for subscribing.

    Websites in our network