View more on these topics

Julian Gibbs

The Greenchip forestry fund has been launched to take advantage of the prevailing low market values of freehold forests.

These reflect the depressed state of the UK timber market where prices are only one-third in real terms of those in 1996. These low prices resulted from a combination of factors but in particular the influx of cheap timber from the eastern Baltic states following their independence. However, rapidly growing demand in China is predicted to be the most significant factor in increasing the world price of timber.

The UK is in an exceptionally good position to benefit from this. Forestry benefits from a beneficial tax position. There is no income or corporation tax on forestry and it is exempt from inheritance tax after two years of ownership. Only the land is subject to capital gains tax but not the timber.

The Greenchip fund is managed by Scottish Woodlands, which is the country&#39s longest established private forest management company with a turnover in the region of £25m a year. It manages around 200,000 hectares of rural property.

Returns should be a minimum of 6.2 per cent net, which is equivalent of over 10 per cent a year for higher-rate taxpayers. The return should rise over the years.

The fund is marketed to IFAs through Fundconsult.com. The minimum investment is £30,000.

Fund Consulting has made an arrangement for those with mortgage-free houses to borrow against them to invest in this fund and so avoid inheritance after two years. The cost of the mortgage to the houseowner is likely to be nothing because the timber felled each year within the fund provides enough income to meet the mortgage costs.

I find this investment particularly attractive as part of a bigger portfolio.

Recommended

£20 for Burns Anderson half-year

Burns Anderson has announced a turnover of £20m for the first eight months of this year which it says puts it on target for a full year turnover of £30m up from last year&#39s total turnover of £29.7m. It has increased its adviser numbers by 7 from the beginning of the year to 405 and […]

Half of IFAs back trail cash

The September Aifa survey on trail commission has found 51 per cent of IFAs believe trail commission should be received even if there is no evidence of ongoing service. Meanwhile, 39 per cent of the 374 respondents believe it shouldn&#39t. The survey was undertaken in light of the Treasury Select Committee&#39s report on long-term savings. […]

The end of the Furbs as we know it

Well, this is the last installment of my consideration of unapproved pension schemes and how the rules for their taxation will change after A-Day. I have also touched on the fact that proper pension provision depends on a combination of: •Investment selection and management, taking due account of appropriate asset allocation, diversification and correlation principles. […]

Managing the graduate trainee process

The purpose of the professional development contractThe process of developing graduate trainees through the main stages of their programme has to be carefully planned and managed. A manager needs to take responsibility for the programme and keep the progress of the trainee under review. The document outlining the whole process for the graduate traineeship is […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com