Past Investment Performance

The investment return from a forest (separate from the tax benefits of 100% IHT relief and tax-free timber income) comes from the growing timber volume and appreciating timber and land values.

A hectare of forestry land maybe worth £4,000, unplanted. When planted with high yielding Sitka Spruce, that same hectare of land may be worth £10,000, when the trees are 10 years old (with expenditure of approximately £2,500). The value is expected to double every 10 years, so that at age 40, this value may well be £40,000 at which point the trees are mature and ready for harvesting and the cycle starts again.

Most forests comprise a mix of age ranges, meaning income is generated more frequently than once every 40 years.

The "Coniferous standing Sales Index" (by the Forestry Commission) rose from 83.9 to 143.5 between 2012-2018 representing an average increase in timber prices of 8% per annum.

From 1993 to 2018, the IPD maintained a "UK Annual Forestry Index" which calculated the total return achieved by forestry owners. Sadly, this has been discontinued but the total returns achieved for the following periods are as shown below.

Over 3 Years	Over 5 Years	Over 10 Years	Over 25 Years
2015-18	2013-18	2008-2018	1993-2018
11.6%pa	13.6%pa	15.7%pa	9.2%pa