Revenue Note for Guidance
564 Woodlands
This section provides that where an individual makes a disposal of woodland, the consideration for the disposal of the trees growing on the land and saleable underwood are not taken into account for capital gains tax purposes. Thus, where land held by an individual is sold with standing timber on it, the consideration for the disposal is to be apportioned and the part of the consideration attributable to the trees or saleable underwood excluded. Insurance proceeds received by an individual in respect of the destruction of or damage to standing timber or saleable underwood are also excluded for capital gains tax purposes.
As the consideration for standing timber and saleable underwood are excluded from the sales proceeds of woodland, in computing any gain or loss on the disposal of the woodland that part of the cost of the woodland attributable to standing timber and saleable underwood is also to be excluded.
It should be noted that the section applies only to individuals. It does not apply to companies or other bodies of persons.
Example
A buys woodland for €100,000, €70,000 of which is attributable to growing timber. Some years later, he sells the land for €120,000, €80,000 of which is attributable to growing timber. The computation of the gain (disregarding indexation relief under section 556) is —
Selling price of land |
€120,000 |
|
Attributable to growing timber |
€80,000 |
|
Attributable to land |
€40,000 |
|
Cost price of land |
€100,000 |
|
Attributable to growing timber |
€70,000 |
|
Attributable to land |
€30,000 |
|
Chargeable gain |
€10,000 |
Relevant Date: Finance Act 2019