The forestry element in Budget 2016 contained two announcements of interest to forest owners and investors. The programme receives €113.8m for the coming year and forestry income has been removed from the High Income Earners Restriction (HIER) category.

“The €113.8m will be made available under the forestry programme in 2016, which will provide for existing premium payments and support the planting of approximately 7,000ha of new forests,” said Tom Hayes, Minister of State with responsibility for the forestry.

Referring to the removal of forestry income from HIER, for forest owners, he added: “I believe that this is a very progressive move, the benefits of which will be felt long into the future.”

The removal of forestry from HEIR has restored its tax-free status to the pre-2007 situation.

A Department spokesperson said that profit from forestry is now tax-exempt for “active farmers and foresters”, presumably including forest owners.

The sector will wait for further details, which will be provided in the Finance Bill later this week.

However, this announcement is “a major boost to the sector”, according to Michael Fleming, chair of the IFA forestry group. Both Donal Whelan, ITGA and Michael Fleming congratulated Minister Hayes on restoring tax exemption for forestry.

“He is to be congratulated in progressing this and thereby encouraging landowners to plant trees for long-term benefits for their families, society, the environment and climate change mitigation,” said Donal Whelan, ITGA.

“The removal of forestry from HIER is important,” maintained Minister Hayes. “Forestry is of major economic importance in rural Ireland, as well as providing social and recreation benefits.”

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Budget 2016