BIM55205 - Farming: receipts from sales of timber etc

Commercial woodland is not within the statutory definition of farming (see BIM55051). Profits from the sale of timber from commercial woodland are outside tax, although annual payments received by farmers under certain grant schemes in respect of such woodland may be taxable (see BIM55165). Some guidance on the distinction between woodland and farm land may be derived from De Poix v Chapman [1947] 28TC462 (see, in particular, Atkinson J's comments on page 470 about definite separation of woodland and farm land with permanence of purpose and use).

Receipts from the sale of trees planted on farmland should be included as part of the farm receipts (see, for example, (Elmes v Trembath [1934] 19TC72).

Short rotation coppice (SRC) is a way of producing fuel for `green' power stations which burn non-fossil fuels. Poplars or willows are planted at high density. The roots (or stools) are not disturbed and send up shoots which are cut down to ground level every three years or so and used for fuel. SRC is brought within farming by FA95/S154 and has been incorporated into the current definition of farming within ITA2007/S996. For more information see an article in the October 1995 edition of Tax Bulletin.