The Investment Opportunity

Unique Return Drivers…

Predictable organic growth
Sitka spruce grow in volume by 4.0-5.0% per annum*

Value growth
Timber grows in value with age

Impact of timber prices
Generates tax free income or value ‘stored on the stump’

Impact of land values
Positive supply and demand dynamics

Higher and Better Use (HBU)
Enhancing returns from alternative land use opportunities; wind farms, hydro-electric
power, biomass, property development, telecom infrastructure, sporting rights

Index 1 year 3 years 5 years 10 year 22 years
IPD Annual UK Forestry Index 18.4% 17.3% 21.0% 18.8% 8.9%
Equities 0.5% 9.5% 7.7% 6.8% 7.4%
Gilts 11.8% 3.5% 7.1% 6.3% 7.3%
Commercial Property 17.8% 10.5% 10.9% 6.2% 9.3%

Investment focus and selection criteria

Diverse portfolio of high quality forests in the UK

Investment focus will be in Scotland and other areas of the UK where Sitka spruce are particularly high-yielding

A spread of ages that includes both first and second rotations

Mix of established forests and new planting

Access
Age
Location
Quality

Significant Tax Benefits

Tax free income
Proceeds from UK timber sales are tax-free whether the asset is held personally or by a company

Tax free capital gains
Increase in value of standing timber is exempt from capital gains tax (excluding increase in underlying land values)

Capital gains roll-over
Proceeds from the sale of capital assets can be reinvested in UK commercial forestry land to defer the capital gains

No Inheritance tax
Qualifies for Business Property Relief after two years of ownership