"Leaders in our Field"
Wiltshire is a rural county so it's no surprise that we have vast practical experience acting for farmers and landowners on a wide range of agricultural issues.
We have developed a detailed understanding of the issues facing those involved in agriculture and advise on all types of agricultural matters.
We offer prompt and practical advice to guide you through your transaction. If you have an agricultural query please contact any of our offices and they will put you in touch with one of our team or simply click on the "Quick Enquiry" link at the top right of this page to submit an e-mail enquiry.
There are many issues which must be considered when purchasing agricultural land and farms which require specialist knowledge and experience which many conveyancers don’t have. These may include:
- Sales including machinery and livestock
- Sporting rights
- Holdover rights to allow the seller access to the land after completion where crops are not included in a sale
- Early access rights for buyers who need to start working the land before completion
- Private water supplies, water abstraction licences and private drainage issues
- Wayleaves for cables, pylons and pipelines and apportionment of sums due under such agreements
- Dealing with charges over assets included in the sale
- Environmental issues
- Rights of agricultural tenants either on termination of their tenancy or where the tenant is to remain in occupation following the sale
- Rights of employees and the duty to inform and where necessary consult with any employees who will transfer to the new owner under the TUPE regulations
- Grants and obligations under agri-environmental scheme, woodland grant scheme etc.
- Quota transfers
- Transfer of entitlements and apportionments of any payments
Our team is experienced in dealing with issues which are unique to agricultural sector.
Choosing the right business structure is of the utmost importance when it comes to securing the long term success of your farming business.
An appropriate business structure enables you to run the business efficiently from a tax perspective and can assist greatly when it comes to tax efficient succession planning.
In order to find the right solution we will work closely with you, your accountant and other advisors to ensure that everyone is taking a unified approach and in particular to ensure that the business structure is appropriate, taking into account fundamental issues such as:
- The roles of family members within the business
- Planning for death or retirement
- Ownership of key assets
- Understanding tax liabilities which may arise such as Capital Gains Tax, Stamp Duty Land Tax and Inheritance Tax
- Securing available reliefs (such as Agricultural Property Relief and Business Property Relief)
The Partnership is by far the most common business structure adopted by farming businesses and, with a properly considered and drafted Partnership Agreement, can offer a good balance between certainty and flexibility.
Sadly, many farming partnerships do not have an up-to-date partnership agreement and, in the absence of any agreement, a farming partnership will be governed by the Partnership Act 1890.The basic provisions set out in this act are almost certainly insufficient for a modern farming partnership and could lead to highly undesirable outcomes particularly from a tax perspective.
No partnership agreement is straightforward, but there are a number of factors unique to farming businesses which make farming partnerships all the more challenging.
The key benefit of a limited company is that is limits the liability of its owners (unlike with the traditional partnership in which the partners are personally liable). This enables you to protect your personal assets from many of the usual business risks.
Companies have their own legal identity meaning they can enter into contracts, buy and sell goods or property, sue and be sued.
They also provide flexibility of ownership in that shares can easily be bought and sold.
If opting for the limited company route, it is important to put in place a shareholders agreement and have properly drafted articles of association. The articles of association set out the powers of the company, whereas the shareholders agreement is a contract governing the relationship between the owners and, in this respect, the shareholders agreement will deal with many of the issues that a partnership agreement would deal with in a traditional farming partnership.
Share farming is where two or more parties share the input costs and revenue between them whilst maintaining separate businesses. Neither party receives a guaranteed income.
All revenue is split according to the value of the inputs provided by each party.
Share farming may be a good solution for farmers wishing to take a step back from the business without jeopardising tax reliefs which may be available. It also offers a route in for new farmers who can reinvest their profits to gradually increase their share over time.
It is of course important to ensure that a suitable agreement is in place so that each party is clear what is required of them and what they are entitled to.
This is a form of joint venture whereby the farmer provides the land and the contractor provides labour and machinery.
Typically, a separate bank account is set up out of which costs are paid and into which revenue is received. The contractor will charge a fixed fee and the farmer will be entitled to a basic return. Any residual profits will then be divided between the parties in accordance with their agreement.
It is important for the farmer to retain control of day to day decisions to protect tax reliefs and this should be made clear in the agreement.
Farm shops, wedding venues, cafes, holiday accommodation, renewable energy, self storage, the list of opportunities is endless.
Diversification, if carried out successfully, can provide significant financial rewards. It can help safeguard the farming business by providing an income stream which isn’t susceptible to the same external factors which may influence the farming income (such as subsidy payments or seasonal fluctuations). It can also be a good way to build the business so that it is capable of providing income sufficient to support the whole family, which may make succession planning a much easier task.
Diversification may require significant financial investment however grants may be available to help.
Before proceeding with any diversification project there are a number of issues which should be considered, for example:
- Changing the use from agricultural to non-agricultural may require planning permission
- Legal restrictions may prevent certain land and buildings being used for the intended purposes
- Tax reliefs may be jeopardised by diversification. In particular, inheritance tax and capital gains tax reliefs may be put at risk. It is therefore important to consider how diversification sits within or alongside current farming activities and how it may impact on any estate or succession planning which has been carried out.
- If you are a tenant farmer looking to diversify you need to consider whether consent is needed from your landlord in accordance with your tenancy agreement before changing the use of the land. Failure to do so may impact upon rent reviews and compensation and could even result in the landlord seeking to terminate the tenancy for breach, especially if you have succession rights which the landlord may be looking for a way out of.
Many of these pitfalls can be avoided or at least mitigated through careful planning so it is important to seek advice at the outset.
Farm tenancies are an extremely complicated area of law and there are many pitfalls to watch out for. The two mains types of tenancy are:
- Agricultural Holdings Act 1986 tenancies
- Farm Business Tenancies under the Agricultural Tenancies Act 1995
We can also assist with tenancies of farm dwellings for agricultural workers, including Assured Agricultural Occupancies under the House Act 1988 and Protected Agricultural Occupancies under the Rent (Agricultural) Act 1976. In addition we have considerable experience dealing with non-agricultural business tenancies where, perhaps due to diversification, the agreement will fall under the Landlord and Tenant Act 1954.
Different rules apply to different types of tenancy. We can advise on all issues including:
- Grant of new tenancies
- Surrender of tenancies
- Forfeiture and Termination of tenancies
- Succession rights
- Repairing obligations
- Rent reviews
- Breaches of tenancies
- Dispute resolution
- Security of tenure (the right to a new tenancy at the end of the term)
- Unwritten tenancies
Identifying possible development opportunities can be a great way to maximise the value of your land. There are many ways to realise value of potential development land. The traditional route was for landowners to enter into an option agreement with developers and, whilst option agreements are still popular, more and more Landowners are now choosing to go down the route of land promotion agreements.
Land Promotion Agreements – here the land owner instructs a third party (the promoter) to obtain planning permission on their behalf. The promoter is often paid based on a percentage of any increase in the value of the land as a result of the planning permission being obtained.
Promoters will often take on a large proportion of the risk and generally take responsibility for the costs of obtaining permission; however the owner retains ownership of the land giving them more options in the event that permission is granted. It may be that the owner wishes to develop the land themselves or alternatively, the site can be sold to a developer.
Option agreements – option agreements are entered into between the landowner and developer and give a developer the option to purchase land at any time during the agreed option period.
Generally, once an option agreement has been entered into, the developer will seek planning permission for the land and if granted, will then serve notice on the landowner requiring the land to be sold.
The sale price may be agreed in advance, but often it is calculated in accordance with a formula set out in the option agreement.
The land owner usually receives an initial payment (or option fee) at the time of granting the option. This is because the landowner is restricted in their dealing with the land during the option period.
Overage – If you are intending to sell land which has potential to be developed at some point in the future but which is unlikely to get permission now, or you need to sell land prior to obtaining planning permission, you should consider entering into an overage agreement.
This type of agreement provides that, in the event of planning permission being granted in the future, the owner at that time will be required to make a further payment to you, generally calculated based on a percentage of any increase in value as a result of the permission.
These agreements carry a greater risk to the landowner and are often the cause of disputes, however they do offer a solution where a quick sale is required.
With pressure on us all to reduce carbon emissions, renewable energy is providing many opportunities for landowners who have land which may be suitable for solar panels, wind turbines or battery storage.
Generally these solutions will involve the lease of land to the renewable energy company and easements or wayleaves will be required in favour of the distributor.
We have considerable experience acting for land owners in such matters.
Working out how and when to pass on your farm to the next generation is one of the most difficult decisions to make. There are many issues to consider; you cannot rely on a “one size fits all” approach and the solution will rarely be obvious.
We understand the issues that you face and have worked with many clients to help them balance the issues in order to reach the right decision. This process will involve us working with you, your accountants and other advisors and may include:
- reviewing your Will
- considering the balancing of your estate between those family members who are still farming and those who are not,
- making Lasting Powers of Attorney to cover the potential issues which could arise should you encounter health problems,
- record keeping with regard to inheritance tax planning,
It is essential to regularly review the position as legislation and your situation changes.
Whilst there are many areas of cross over between Equine Law and agricultural law, there are certain issues to consider
Our team have experience in dealing with:
- Sale and purchase of equestrian property
- Tenancies of equestrian land and buildings
- Compliance with planning legislation
- Impact of equestrian use on tax reliefs
As with all businesses, disputes may arise from time to time. Our litigation team has solicitors who are experts in dealing with all types of dispute including:
- Boundary disputes
- Disputes over rights of way or rights of access
- Tenancy disputes
- Employee issues
- Contested wills, claims under the Inheritance Act or proprietary estoppel claims which can arise where a child claims they worked on a farm for little or no pay under the promise the farm or part of it would be left to them
- Disputes between partners and shareholders of the business
- Disputes with customers and suppliers over the supply of goods or services
- Disputes arising from the sale of goods or livestock
- Debt collection
No-one enters into a marriage, with the belief that the relationship will break down. The Office for National Statistics, however, estimated in 2012 that 42% of marriages will end in divorce. Before introducing assets into a marriage, especially where those assets are used by you to earn a living, it is important to ensure that those assets are protected in the event that the marriage fails in order to protect you, your family and your source of income.
Farming families in particular have assets that have been in the family for generations. There are complex ownership schemes and transfers may take place for inheritance tax purposes. If a marriage ends, the business may need to be broken up with land being sold as a Court seeks to address “need” for both parties.
In circumstances such as these, you would be strongly advised to consider entering into a pre-nuptial agreement. Entering into such an agreement before marriage allows a couple to plan how they will divide current and future assets should they divorce in the future. The agreement would then seek to protect the agricultural business, together with property and money acquired before the marriage.
Pre-nuptial Agreements are entered into by a couple prior to marrying and are intended to regulate what happens in the event of the marriage breaking down. While not in itself legally binding, the agreement is a factor taken into consideration by the Court and the use of Pre-nuptial Agreements has significantly increased in recent years.
When employing staff it is important that a proper contract of employment is put in place at the outset. There can be financial consequences for failing to document certain agreed terms in the proper manner and it can affect your ability to take action you may need to take in relation to those employees.
It is also important to ensure that you know the status of your staff because many people mistakenly believe their staff are self employed and do not have associated employment rights when in fact they may do. This can prove to be an expensive mistake.
In the unfortunate event that you encounter problems with your employees, you should consider seeking legal advice before taking any disciplinary action or dismissing any employees in order to avoid claims for breach of contract, discrimination or unfair dismissal.
If you are selling your business or contracting out elements of it, you will also need to be aware of the TUPE Regulations which could mean the purchaser or contractor may be obliged to continue employing your staff. This is a complex area of employment law which most business owners will require advice on at an early stage.