We have been investing in UK-based forestry since 2010. Par Equity’s forestry investment funds offers investors access to a sustainable, tax efficient investment that typically requires a more significant capital outlay. Key features include:
This interview is not advice and the product discussed is not suitable for everyone. Forestry investments are illiquid and require a long term commitment. You could lose your capital. Tax rules can change and tax benefits depend on your circumstances. If you’re unsure whether an investment is right for you, please seek professional advice.
Benefits of Investing in Commercial Forestry include
- Attractive returns. According to the IPD UK Annual Forestry Index, over the past 25 years, average annual returns have been 9.2% which compares favourably with more mainstream asset classes. IPD have discontinued the Index. Demand for timber is forecast to increase and with active management, there is potential for further value in the form of renewable energy schemes or other such projects
- Combatting climate change. Corporates and investors are more focused on Net Zero carbon emissions and the benefits of carbon sequestration which arise from new planting of forestry land.
- Portfolio diversification. Forestry has low correlations with traditional asset classes.
- Hedge against inflation. As a real asset, forestry has strong inflation-beating characteristics
- Tax planning benefits for retail investors:
- 100% relief from inheritance tax (after a two-year qualifying period)
- No income tax payable when selling timber
- No capital gains tax on the increase in value of the trees
Par Equity’s forestry investment vehicles seek to
- Focus on UK-based assets, primarily in Scotland, the North of England and Wales
- Provide a diversified forestry portfolio including new planting opportunities and more mature asset
- Access off-market opportunities at more attractive prices
- Take a proactive management approach to the sites together with our appointed asset manager
The Forestry Team
Investments in unquoted shares carries an above-average level of risk compared with quoted shares. An investor may not get back the amount invested and could lose all of the capital invested. The value of an investment may go down as well as up, but in any event such value can only be realised on a sale of that investment. These investments are highly illiquid and as such, there may not be a readily available market to sell them, and no market value exists. Furthermore, past performance is not necessarily a guide to future performance, as there are many contributory factors that can influence the value of shares in early-stage companies.