Farming & Forestry: Forestry Grant Scheme

The Forestry Grant Scheme (FGS) is funding from the Scottish Government, available through the Scottish Rural Development Programme to support (a) the creation of new woodlands to contribute towards meeting the Scottish Government's target of 10,000 hectares of new woodland per year and (b) the sustainable management of existing woodland in a bid to create environmental, economic, and social benefits including mitigating climate change, supporting sustainable forestry industry with a reliable timber supply, and supporting rural development. FGS will, for the period 2014-2020, make available £252 million to eligible FGS applicants.

Why invest in forestry?

Forestry is considered a safe asset in the current economic and political climate and benefits include:

tax incentives such as no inheritance tax paid (on land and trees) if held for more than two years, income from timber sales is free from income and corporation tax, and increasing timber values are free from Capital Gains Tax; higher demand for timber; increasing timber prices; higher agricultural land values by putting unproductive or low-yielding land to better use; grants available for new planting, fencing, infrastructure, maintenance, improvements and management; low management costs; ecosystem and wildlife conservation benefits; shade and shelter for livestock and windbreak for crops; drought and water conservation benefits; soil erosion, water quality and flooding prevention benefits; and Basic Payment Entitlement is unaffected. Funding packages

There are different funding packages available falling within several categories and are generally split into an initial planting payment and a five year annual maintenance payment. Capital grants are also available for fencing, tree protection and other similar operations. Payments fall under either the woodland creation category or the woodland improvements and sustainable management of forests category, and all applicants must meet eligibility standards set for each funding package available.

Example Categories

Woodland Creation: There are nine creation categories depending on the type of tree, with varying payment rates. Higher payment rates are available if the woodland or forest falls within certain target areas and is of the type required for each such as a Local Authority Woodland Strategy area; an area identified by the Cairngorms National Park Authority; an area identified by FCS-SEPA as likely to provide multiple benefits for...