According to a survey of UK woodland owners, estate managers and land agents, 60pc of respondents are now less likely to invest in new planting because of changes to Agricultural and Business Property Relief (APR and BPR) which came into effect in April.
At the end of last year, rural campaigners welcomed a government climbdown which saw the controversial new threshold for full inheritance tax relief raised from £1m to £2.5m – after months of pressure and protests, particularly in the farming industry.
But now the Confederation of Forest Industries (Confor), the Country Land and Business Association (CLA) and the Royal Forestry Society (RFS) have warned the reforms could impact timber supply, carbon storage and nature recovery efforts.
The results of their new survey suggest that family-owned woodland and mixed estates may be at particular risk, with many considering earlier timber harvesting, selling woodland, altering succession arrangements or reducing future investment in woodland management.
Norfolk farmer Gavin Lane is the national president of the Country Land and Business Association (CLA) (Image: CLA)
West Norfolk farmer and CLA president Gavin Lane said: “A drop in tree planting, earlier felling, land sales – these are the warnings from the UK’s forestry sector, as woodlands risk becoming unintended casualties of the government’s inheritance tax changes.
“We know these reforms are hurting family-owned businesses across the UK, but their impact on forestry has received far less attention.
“The government has legally binding environmental targets and ambitions to accelerate tree planting.
“This evidence suggests those goals are now in danger, undermining the sector and the investment made to date.”
Stuart Goodall, chief executive of Confor, said: “This survey provides compelling evidence that many woodland owners across the UK expect to be affected negatively by these inheritance tax changes.
“Nearly 60pc of respondents said they are now less likely to create new woodland, and many are already considering bringing forward timber harvesting, woodland sales, or restructuring ownership.
“Such actions will undermine delivery of the government’s own policies on nature recovery, carbon, timber supply, and the rural economy.”
Mr Lane emphasised the need to work collaboratively with government.
He said: “We are ready to work with government on solutions to prevent undoing the progress on environmental and tree cover targets which our survey shows will result from the IHT changes.”