High Income Earners Restriction and exempt woodlands income

Profits or gains from the occupation of woodland in the State which is managed on a commercial basis and with a view to profit are exempt from Income Tax and Corporation Tax (but not Universal Social Charge and Pay Related Social Insurance) under section 232 Taxes Consolidation Act 1997.

Exempt woodlands income is a specified relief for the purposes of the High Income Earners Restriction ("HIER"). That is, an individual who receives such exempt income will have to consider whether or not the provisions of Chapter 2A of Part 15 Taxes Consolidation Act 1997, which relate to the HIER, have application.

It has come to Revenue's attention that a number of individuals, who are not carrying on a forestry trade, are incorrectly attempting to use generally accepted accounting principles to spread the exempt income over a number of years. In that way, these individuals are attempting to avoid the application of the HIER. Revenue has recently published guidance in Tax and Duty Manual Part 07-03-09 on the calculation of profits from the occupation of woodlands on a commercial basis, for the purposes of determining the amount of the specified relief claimed, as required to apply the HIER.

31 August 2015