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Teaming up with asset consultancy specialists Fountains Forestry, the company said it can offer advisers solutions to tax woes by discussing the attractions of investing in forestry.

Hannah Parkinson, assistant Director of Close Trading Companies, said: “Investors are turning to their advisers to help them find solutions to inheritance tax and want to diversify the risks within these portfolios as much as possible.

“We believe that investors seeking tax mitigation advice and opportunities will find the new Close Trading Companies Forestry proposition with Fountains very compelling.

Under the plan, individuals seeking to mitigate a potential inheritance tax liability, can retain control over the operation of their own individual company by setting up a trading company with Close Investments.

The applicants are allotted shares in their own Close Trading Company, which will give them a business property relief in respect of the gross subscription in the company – under current tax legislation; this is at a rate of 100 per cent.

According to the firm, this is only possible provided all the necessary conditions have been met and the shares have been held for two years.

However, the tax treatment depends upon the individual circumstances of each client and may be subject to change in future.

Close Investment offers a portfolio of a diversified range of investment opportunities in forestry, residential property, self storage, pubs and commercial property to provide a spread of risk and reward in which the investor may participate.

Despite the fund being sector heavy in Residential, at 71 per cent, and commercial, at 19 per cent, Close Trading Companies said it is beginning to see some very attractive opportunities in forestry, which is 5 per cent of its portfolio.

Steven Oliver, of Close Investments Property, said: “For more than 50 years, Fountains has offered expert forestry investment and management advice in the UK. It manages more than 130,000 acres of woodland in the UK and more than 750,000 acres in the US. Its expertise is second to none.”

Close Trading Companies already has more than £6m invested in more than 4700 acres of forestry plantations in Scotland and Wales on behalf of clients, according to the firm report at end July 2008.

Mr Oliver said: “Forestry represents an exciting long-term investment proposition in the UK and an excellent diversification tool for investors seeking inheritance tax mitigation – subject to two years full investment and under the present UK tax legislation.”

So far the product has been welcomed by many IFAs.

Kevin Morgan, managing director for Hertfordshire-based Consilium Asset Management, said: “Under current laws, any gift given more than seven years before a person’s death is not subject to inheritance tax.

“The two year clauses of this investment will certainly help investors over-come the convention rule.”

The fund has an initial charge of 6 per cent with a £500 company establishment fee.

Also it has an annual fee of 2.5 per cent on capital committed to residential & commercial developments, public houses and self storage.

There is also 1.55 per cent on the gross plantation cost in Forestry.

The minimum investment for the product is £1000.