Almost 60 per cent of UK woodland owners are now less likely to create new woodland following the British government’s inheritance tax reforms, with more than 200 owners, estate managers and agents flagging earlier felling and woodland sales among the immediate alternatives now under active consideration.
That is according to a joint survey by the Country Land and Business Association (CLA), the Confederation of Forest Industries (Confor) and the Royal Forestry Society (RFS), with the evidence submitted to HM Treasury and the Department for Environment, Food and Rural Affairs (DEFRA) alongside CLA correspondence to MPs and other industry stakeholders.
Wood Central understands the joint submission represents the first sector-wide quantification of the reforms’ impact on woodland investment, with the three bodies citing the data alongside concerns that family-owned woodlands and mixed estates face fragmentation and earlier felling under the new tax settings.
“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,” said Gavin Lane, the CLA president, who pointed to the survey as the first sector-wide evidence of the reforms’ reach into woodland investment.
Just one third of respondents told the survey they believed they would not be affected by the tax changes, with almost 60 per cent now less likely to create new woodland, and others signalling earlier timber harvesting or woodland sales as direct outcomes alongside reduced future investment in woodland management more broadly.
“We know these reforms are hurting family-owned businesses across the UK, but their impact on forestry has received far less attention,” Lane said, with the survey noting that forestry typically carries significant capital value but yields low income and long-term, irregular returns, leaving family woodlands disproportionately exposed under the new threshold settings.
The CLA, Confor and RFS warned that earlier felling and reduced woodland creation across the survey cohort would compress UK domestic timber supply over the medium term, with carbon storage capacity and continuous-cover forestry similarly exposed where the long-rotation management approach depends on multi-generational woodland ownership.
“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,” Lane said.
A UK government spokesperson said the Treasury was backing forestry through £1 billion in tree-planting investment, and that woodlands’ relief from inheritance tax remained unchanged, with woodlands continuing to attract favourable income tax and capital gains tax treatment. The spokesperson said the government had raised the inheritance tax relief threshold for agricultural and business assets to £2.5 million to protect more small family businesses and farms, while ensuring the largest estates make a fair contribution to the public finances.
The joint evidence has been submitted to HM Treasury and DEFRA, with Lane warning the survey leaves the British government two competing pressures to reconcile — its legally binding tree-planting ambitions on one side, and a sector now actively reversing the very investment decisions those ambitions depend on.
