Monday 24th August 2015
Author: Stuart Leaver MRICS FAAV
The word succession in agriculture can have a varied response from farmer to farmer, but generally it’s a topic which is avoided. It is however realistically one of the most important matters facing your business if you want your farming business to prosper into the future after your gone or once you have retired.
Whether you are a farming Tenant or whether you are an Owner Occupier, there are many matters to consider from the tenure of the successors occupation of the land, the structure of your farming business or generally how you wish your assets to be handled once you withdraw from farming.
If you are a farming Tenant, you will need to make sure you take professional advice in relation to your tenancy agreement. Some types of older agreement under the Agricultural Holdings Act 1986 carry with them rights of succession for two future generations, but some do not. It is imperative that you ensure that if you do have someone looking to take on your agricultural tenancy upon death or retirement then matters need to formally in place. If they are not, you stand a good chance of your family losing the agricultural tenancy altogether. Sometimes it can just be a matter of ensuring that your business is structured correctly and that your successor is ticking the correct boxes under the eligibility and suitability criteria.
Those tenancy agreements which do not carry with them a right of succession could still allow you to take up discussion early with your Landlord. It may be beneficial to them from a tax perspective to grant you a longer term agreement under a new style tenancy with your successor as the tenant or as a joint Tenant. By striking up an agreement with your Landlord it may show that you are being proactive and looking into the future which most Landlords would hopefully take positively.
As an Owner/Occupier, making sure you have everything structured and in place is also imperative. Whether this be the structure of your farming business and stock, the occupation of your farm house or making use of your right to a Potentially Exempt Transfer and more. They are all matters to consider when looking at how to leave your assets in the most efficient way.
One key message to farming tenants and land owners is to make sure that you speak to your professional advisors and do not leave it until the last minute. For what may seem pointless in the short term can leave you wishing you had taken further advice in the long term.
If you are a Tenant or Land Owner who wishes to discuss matters further then please do contact Leavers Rural to discuss what options are potentially open to you. This is a matter which shouldn’t be ignored, and usually when it is, it will cause problems.
This article is not to be taken as advice and should be used for information purposes only as each situation is different and will require varied advice.
Leavers Rural Surveyors is the trading name of Leavers Rural Surveyors Ltd. Registered in England, Company No. 08681412. Registered Office: The Farm Office, White House Farm, Brookfield Road, Churchdown, Gloucestershire, GL3 2PE. Regulated by the RICS.