Tax Aspects of Woodlands Development

Article Abstract:

Investment in forestry is one of the safest long-term investments in United Kindgom because of the increased importance of timber. International bodies are pressuring the government to set up woodland ventures on the basis of prediction that there will be a world shortage of timber by the end of the century. Government is giving substantial financial assistance and favorable tax treatment for developers. Where woodlands are managed on a commercial basis, the occupant is assessable to income-tax under the provisions of Schedule B unless an election is made to have those woodlands dealt with under Schedule D provisions. An allowance of ten per cent per annum together with a maximum initial allowance of twenty per cent is available in respect of capital expenditure on roads, forestry buildings, cottages, permanent fences or other works. When an occupant disposes of timber together with land upon which it grows, the proceeds of sale relating to the timber is not considered taxable.

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CGT - Non-Resident Trusts

Article Abstract:

A draft legislation is published in respect of Capital Gains Tax (CGT) and non-resident trusts to limit the impact of the decision in Leedale v. Lewis. Where beneficiaries have discretionary interest, the gains are taxed to the content that a benefit is received from the trust. Where there is a fixed interest, the holder of such an interest may receive all or some of the trust property at some future time. In the case of Leedale v. Lewis, the beneficiaries held both interests and were assessed on their fixed interest without receiving anything from the trust. Under the new legislation the beneficiary may claim a postponement of any tax liability until he receives the benefit from the trust.

Taxation, Beneficiaries, Trusts and trustees, Trustees, Trusts (Law)

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