Readers’ forum: Tax consequences of planting trees in development contract

My client is unfortunately struggling with farm profitability and is therefore selling off small areas of land and buildings for development projects where possible.

As part of the current development deal being negotiated with the local council the promoter agreed that my client has to plant five acres of trees on existing farmland which is located away from the project.

The tax treatment of the cost of tree planting and maintenance is a potential tax dilemma. It is assumed that the physical cost of the tree planting of approximately £20 000 is correctly allowable as a CGT cost against the development gain. However the tax question arises as to the future cost of tree maintenance over the next 30 years (spraying around the trees controlling brambles thinning etc). The saplings were planted in the heatwave so there will be some replanting costs for...