Question: I have a number of acres which have been idle for the past few years, and I’ve been toying with the idea of using them to plant forestry.
It would be a nice way to provide some additional income for the farm, but I don’t really know much about the incentives available,
or if there are any consequences from a tax and legal perspective. Is it worth the upfront investment?
Answer: Planting forestry can have financial benefits but there are legal, tax and practical implications to consider. Some of the pratical considerations include: is some/all of my land suitable for establishing a forest?
Are there environmental restrictions on my land, eg Special Areas of Conservation, Special Protection Areas, etc? Do any other restrictions limit my planting options, eg acid sensitive area, electricity lines, nearby houses, deer, etc?Have I decided what I want from my new forest, eg production of commercial timber, creating a native woodland or combining farming with growing trees (ie agroforestry)?Which Forest Type (FT) category will suit my land and objectives best? Will planting optimise returns from my family farm into the future?How will planting interact with the BISS, CRISS, CIS-YF, ACRES, ANC Schemes, etc? Am I aware that the switch to forestry is a permanent land use change?Legal considerations
Once you have established that this move could practically work for you, the next thing to think about is the legal implications. It is important to keep in mind that you, as the applicant, have ultimate responsibility to DAFM for your forest.
Insurance against potential hazards such as fire and windthrow and/or the replanting obligation should be considered to protect your investment.
The Forestry Act 2014 will apply when creating or managing a forest. This means that:
An Afforestation Licence is required for afforestation projects where the area involved is greater than 0.10 hectares (approximately 0.25 acres). The only exception is the Native Tree Area Scheme.A Forest Road Works Licence is required to carry out forest road works.A Felling Licence is required to fell or otherwise remove a tree or trees and to thin a forest for management reasons. A replanting obligation also applies, and it applies to agroforestry too.An Aerial Fertilisation Licence is required to carry out aerial fertilisation.You have to respect the Forestry Act 2014, other relevant legislation and adhere to grant aid regulations/conditions.
Planting Applications and Contracts with a Registered Forester
Preplanting applications must be prepared by a ‘Registered Forester’. These are professional foresters, working either as consultant foresters or employed by forestry companies.
They are registered with DAFM and are authorised to submit forestry grant scheme applications.
Ensure that you have a robust written contract with your Registered Forester in place clearly setting out your chosen preferences as described below. Contracts should be referred to a solicitor.
DAFM sets the standards of the Afforestation Scheme and approves grant and premium payments.
Aishling Meehan.
Preplanting applications are submitted to DAFM and technical approval may be issued following assessment. Establishment operations can only begin once subsequent financial approval has been obtained.
As it can take a substantial period of time for the application to be processed, make sure to apply for planting approval well in
advance. Include any areas you are unsure of in the application, as you can plant as much or as little of the area that receives approval afterwards.
When making an application, you need to decide which option suits you best. The option you choose should reflect your circumstances and the amount of time you can allocate to planning, organising and doing the work.
Option 1: Organise the establishment work yourself.
This is the most hands-on option, so you must invest time in gaining a good knowledge of forest establishment and management techniques.
Option 2: Hire a Registered Forester to organise some or all of the establishment work.
The Registered Forester will coordinate some or all of the work, as they will have knowledge of subcontractors and machine operators and can source trees and other materials.
You also need to consider who will look after the trees for the first four years. You can do this work yourself or your Registered Forester can look after the young trees on your behalf in return for the ‘second grant’.
This is payable at the end of the maintenance period (usually after four to five years). No matter which option you choose, all paperwork at pre-planting, post-planting and at the second instalment stage must be prepared by a Registered Forester working on your behalf.
Obligation to monitor progress
Regardless of who is establishing and/or managing the trees for the first four years (you or your Registered Forester), it is important to monitor progress.
Prior to the payment of the second grant at Year 4, you, as the forest owner, must be satisfied that the forest has been maintained in accordance with best forest practice and only if you are happy with your forest should you sign the relevant form (Form 3).
Planting land is a major decision and you should be satisfied that the establishment option you choose is right for you. Talk to your local Teagasc Forestry Advisor or Registered Forester who can help you assess your options.
Find further advice on this query in this week's Money Mentor.
Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors does not accept responsibility for errors or omissions howsoever arising. E-mail aisling@agrisolicitors.ie
Read more
Legal query: road to be taken in charge by local authority
Evaluating the tax advantages of incorporating your farm business
Question: I have a number of acres which have been idle for the past few years, and I’ve been toying with the idea of using them to plant forestry.
It would be a nice way to provide some additional income for the farm, but I don’t really know much about the incentives available,
or if there are any consequences from a tax and legal perspective. Is it worth the upfront investment?
Answer: Planting forestry can have financial benefits but there are legal, tax and practical implications to consider. Some of the pratical considerations include: is some/all of my land suitable for establishing a forest?
Are there environmental restrictions on my land, eg Special Areas of Conservation, Special Protection Areas, etc? Do any other restrictions limit my planting options, eg acid sensitive area, electricity lines, nearby houses, deer, etc?Have I decided what I want from my new forest, eg production of commercial timber, creating a native woodland or combining farming with growing trees (ie agroforestry)?Which Forest Type (FT) category will suit my land and objectives best? Will planting optimise returns from my family farm into the future?How will planting interact with the BISS, CRISS, CIS-YF, ACRES, ANC Schemes, etc? Am I aware that the switch to forestry is a permanent land use change?Legal considerations
Once you have established that this move could practically work for you, the next thing to think about is the legal implications. It is important to keep in mind that you, as the applicant, have ultimate responsibility to DAFM for your forest.
Insurance against potential hazards such as fire and windthrow and/or the replanting obligation should be considered to protect your investment.
The Forestry Act 2014 will apply when creating or managing a forest. This means that:
An Afforestation Licence is required for afforestation projects where the area involved is greater than 0.10 hectares (approximately 0.25 acres). The only exception is the Native Tree Area Scheme.A Forest Road Works Licence is required to carry out forest road works.A Felling Licence is required to fell or otherwise remove a tree or trees and to thin a forest for management reasons. A replanting obligation also applies, and it applies to agroforestry too.An Aerial Fertilisation Licence is required to carry out aerial fertilisation.You have to respect the Forestry Act 2014, other relevant legislation and adhere to grant aid regulations/conditions.
Planting Applications and Contracts with a Registered Forester
Preplanting applications must be prepared by a ‘Registered Forester’. These are professional foresters, working either as consultant foresters or employed by forestry companies.
They are registered with DAFM and are authorised to submit forestry grant scheme applications.
Ensure that you have a robust written contract with your Registered Forester in place clearly setting out your chosen preferences as described below. Contracts should be referred to a solicitor.
DAFM sets the standards of the Afforestation Scheme and approves grant and premium payments.
Aishling Meehan.
Preplanting applications are submitted to DAFM and technical approval may be issued following assessment. Establishment operations can only begin once subsequent financial approval has been obtained.
As it can take a substantial period of time for the application to be processed, make sure to apply for planting approval well in
advance. Include any areas you are unsure of in the application, as you can plant as much or as little of the area that receives approval afterwards.
When making an application, you need to decide which option suits you best. The option you choose should reflect your circumstances and the amount of time you can allocate to planning, organising and doing the work.
Option 1: Organise the establishment work yourself.
This is the most hands-on option, so you must invest time in gaining a good knowledge of forest establishment and management techniques.
Option 2: Hire a Registered Forester to organise some or all of the establishment work.
The Registered Forester will coordinate some or all of the work, as they will have knowledge of subcontractors and machine operators and can source trees and other materials.
You also need to consider who will look after the trees for the first four years. You can do this work yourself or your Registered Forester can look after the young trees on your behalf in return for the ‘second grant’.
This is payable at the end of the maintenance period (usually after four to five years). No matter which option you choose, all paperwork at pre-planting, post-planting and at the second instalment stage must be prepared by a Registered Forester working on your behalf.
Obligation to monitor progress
Regardless of who is establishing and/or managing the trees for the first four years (you or your Registered Forester), it is important to monitor progress.
Prior to the payment of the second grant at Year 4, you, as the forest owner, must be satisfied that the forest has been maintained in accordance with best forest practice and only if you are happy with your forest should you sign the relevant form (Form 3).
Planting land is a major decision and you should be satisfied that the establishment option you choose is right for you. Talk to your local Teagasc Forestry Advisor or Registered Forester who can help you assess your options.
Find further advice on this query in this week's Money Mentor.
Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors does not accept responsibility for errors or omissions howsoever arising. E-mail aisling@agrisolicitors.ie
Read more
Legal query: road to be taken in charge by local authority
Evaluating the tax advantages of incorporating your farm business
This is a subscriber-only article
SHARING OPTIONS: