Tax-break trees: how woodland became a store of wealth for the rich

On the English-Scottish border a small species of butterfly, the northern brown argus, has fended off one of the biggest investors in the UK.

Todrig, with its heath moorlands and hundreds of species of flora and fauna, represents an investment that could save Britain’s wealthiest families millions of pounds in inheritance tax.

But first the ground needs to be cleared, and sown with commercial tree saplings – a plan that has been defeated, for now, by the tiny butterfly.

“No one wants this,” says Camilla Fowler, who chairs the local Lilliesleaf, Ashkirk and Midlem community council. “This kind of forestry scars the landscape and replaces it with monocultural, dark trees that harms our biodiversity.”

Todrig – the size of about 560 football pitches – is the site of just one of many battles unfolding along the border, as big investors move in on vast expanses of land that can be stripped back and replanted for the mass production of timber.

The “vulnerable” status of the northern brown argus has halted plans for a forest plantation in Todrig, after a legal challenge forced the local environmental regulator to carry out more checks.

But Gresham House, the £11bn City of London investor that bought the land for £12m in 2022 – six times its price just three years before – is still aiming to turn the land into a tree farm.

Now, as demand for these tax-break trees grows, campaigners are warning that investors are in danger of putting further strain on natural grassland and forests across the UK.

Lucrative business

“There is an enormous difference between Sitka spruce trees and native woodland, and other types of habitats such as meadows and calcareous grassland in terms of the wildlife they support,” says David Lintott, a barrister who has led the legal campaign against the forestry plan at Todrig via his company Restore Nature.

But land is increasingly being targeted for commercial forests. Only an hour away from Todrig at Stobo Hope, the ground has already been cleared, ploughed and sown with rows of tree saplings by a “forestry carbon sequestration fund”, managed by the London-based company True North Real Asset Partners. The investment company argues that Sitka spruce is more effective at capturing carbon compared with native trees – and that they can grow and cut down between two and three “cycles” of Sitka spruce in a single cycle of native woodland.

It is a lucrative business for investors. Industry calculations suggest the value of woodland has roughly doubled over the past decade, exceeding gains from some other physical assets such as commercial property – and helped by increasing numbers of wealthy families who have turned to the sector for a break from inheritance tax.

The UK has one of the highest rates of inheritance tax in the world, at 40% above certain thresholds. Most married couples can pass down £1m tax free to their children, including a £250,000 allowance for their main residence.

But a range of other reliefs has meant that for much of the past decade, wealthy families have often paid the tax at a much lower rate.

Rachel Reeves took an axe to some of these reliefs at her maiden budget, introducing a £2.5m limit on business and agricultural property relief. But one lucrative area escaped the chancellor’s attention: woodland.

Commercial forests – where trees are planted and felled as soon as possible for timber – can qualify for business property relief after just two years of ownership. Investors in woodland also do not pay income or corporation tax on the value of growing timber, and no capital gains tax is due when trees are felled.

The special allowances mean wealthy families can save millions of pounds in inheritance tax if they park their money in woodland. If, for example, a couple owned £100m worth in woodland and it qualified for business property relief, their estate would inherit £5m tax-free, and the remaining £95m would be taxed at half the normal rate.

“Anyone seriously thinking about estate planning should consider woodland as part of the mix,” says Anton Baskerville, of Woodlands.co.uk, a provider in the sector. “Buying land that is commercially managed is one of the key options available.”

The tax break is not widely known – which means that every time the rules change, even if they get stricter, it helps to spark new waves of interest from investors, says Baskerville. “We see spikes when it hits the news cycle.”

Super-rich backers

Dr Josh Doble, the director of policy and advocacy at the campaign group Community Land Scotland, says increasing demand for woodland is coming from buyers seeking a way to reduce their tax burden.

The super-rich have long dabbled in woodland. The private equity tycoon Guy Hands and his wife, the hotelier Julia Hands, have been investors in the sector. In 2019, the Times reported that Julia had spent £67m on almost 30,000 acres in Scotland, and her husband owned 14,000 acres in Perthshire.

Last summer they sold Griffin Forestry Estate for £145m to Gresham House, valued at more than £26,000 a hectare, one of the highest valuations on record for a woodland. The couple are based in Guernsey. Guy Hands declined to comment.

The billionaire Danish retail magnate Anders Povlsen is the biggest private landowner in Scotland. His company, Wildland, had land worth £337m as of 31 July 2025, according to accounts filed at Companies House. However, unlike other ventures in the sector by the super-rich, it is a loss-making rewilding project – restoring native woodland and species on their estates – which makes it unlikely that the Povlsen family could use it towards IHT reliefs.

But it is Gresham House, which specialises in “natural capital”, that has become one of the most prolific private sector buyers of land in the sector – with many wealthy families buying stakes in woodland ownership via its funds.

“It’s shocking how quickly Gresham House has acquired so much land,” says Doble. “In the space of 14 years it has acquired about 73,000 hectares. That is just in Scotland – in our view that works directly against what the Scottish government has been trying to do for the last 25 years in reforming land ownership.

“With institutional landowners, you do not get the same level of accountability and collaboration. You don’t get transparency or benefit sharing when you’re dealing with a huge asset manager.

“It is a case of how do you know how to hold them account if you disagree with the planting that is happening? You’re dealing with big estates, so often there is housing involved, local people work and live there. But there is not a conversation.”

Funds managed by Gresham House collectively control thousands of hectares of land. Campaigners say that makes the company one of the largest private landowners in Scotland, although Gresham House denied this claim, arguing that the land is ultimately owned by its investors.

Backers of Gresham’s forestry funds include the trusts of wealthy families and prominent business people. Investors in its Forestry Partnership – which has net assets of £162m – included the late banker Lord Rothschild, Jeremy Darroch and Nicholas Ferguson, formerly of Sky, the Marquess of Linlithgow, and the family of the late hotel magnate Reo Stakis, according to filings at Companies House.

Does money grow on trees?

Despite the rise in woodland values, locals at Todrig say the huge numbers attached to their local landscape does not match their reality.

“No farmer would buy Todrig for £12m because it is simply not worth that much,” says Fowler.

Valuations are hard to pin down in illiquid sectors, where infrequent deals create uncertainty around prices – and Gresham House itself admits that its forestry funds, which are classed as “unregulated collective investment schemes” (UCIS), can be “difficult to establish an accurate value” for.

Apithanny Bourne, a researcher at the Butterfly Conservation charity, said the inflated values often made locals feel they had little choice but to sell.

“The land is also selling for such high values because of the grants available to forestry – there are farmers who would rather keep it and have an interest in regenerative agriculture, but they can’t afford to keep the land if it is selling four to five times what it was worth,” she said.

There are multiple government grants that help support prices across the sector, she notes, including the woodland creation planning grant, the England woodland creation offer and woodland carbon credits.

“The commercial forests are also just so large and often have no native trees involved,” Bourne says. “So not only are trees being planted on rare habitats, they are built in huge blocks, which means that wildlife can’t actually travel through them.

“Once these trees are planted, the grassland is gone. And it takes hundreds of years for it to get so species-rich – it all just feels very shortsighted.”

A spokesperson for Gresham House says most investors in its funds were institutional and therefore do not consider inheritance tax benefits. They added that it respected the court’s judgment on Todrig and that it would “continue to work constructively with Scottish Forestry to support a lawful and robust re-determination”.

They add: “Todrig has been designed as a high-quality woodland project delivering long-term environmental and economic benefits. Extensive ecology surveys of the landscape and existing biodiversity have informed the design, with sensitive areas identified removed to create a multi-species mosaic.

“The scheme will also deliver wider benefits, including carbon sequestration, local employment, sustainable timber production, reduced reliance on imported commodities, and improved access to land that may previously have felt inaccessible.”

They add that it had undertaken a formal public consultation and invited feedback from statutory bodies including SEPA, NatureScot and RSPB Scotland. The current design includes a commitment to retain about 40% of the site as open ground, which it said was to primarily support biodiversity and habitat creation.

“Once operational, all planting, felling and management plans will be made publicly available, and we will continue to look for opportunities to deliver wider community benefits through improved public access, educational opportunities, and support for local initiatives. This dialogue is essential in shaping a final design that delivers lasting environmental and community value.”