It is increasingly common for parents to give money to their children to help them buy a property or set up a new business. You may intend this purely as a gift to your child to help them with their new venture not appreciating that in the event of a separation or divorce, that gift may be “lost.”
How can you protect this money if your son or daughter subsequently divorces?
Loan or ownership: You can protect your investment in the new venture by either taking a share in the ownership or making a loan which may also then be protected by taking a charge. If you opt for ownership your advisers can ensure that you are registered as one of the co-owners in the appropriate proportion. So, for example, if you are contributing 30% of the purchase price for land or buildings, you can be registered as a co-owner (or one of the ‘tenant in common’) of the property with a declaration of trust which records your 30% interest and any other intentions.
Michael Watson, partner at Shulmans LLP, discusses the planned 5G rollout and the effect it could have on your land…
Farmers have previously allowed telecommunications operators to install mobile phone masts and other apparatus on their land to generate additional income from their real estate assets. This free market worked well when upgrading the networks to 3G and 4G. However, major problems lie ahead with the rollout of 5G because the market for mast sites has effectively seized up.
Deciding what to do with the farm in future years is one of the biggest challenges in the UK’s farming community: should it be held by the family and the farming continue, should it be sold, could a suitable tenant be found and the farm handed over to them, or are there other options?
Whilst farmers cannot always expect the next generation to take on the family business, many are keen to keep the farm within the family. With this in mind, planning who will run the farm in the future is becoming an increasingly pressing issue. However, alternatives to selling the farm can offer exciting prospects.
UK farming desperately needs new entrants in order to maintain competitiveness, energy and innovation – without losing the wisdom of the established farmers. Many farm and estate businesses who bring in fresh pairs of hands have benefited from the new approaches and different perspectives that passionate new entrants can bring.
Becka Wright, Creative Manager at Appetite Me, on entering into rural diversification in a seemingly saturated market…
With more and more land owners and farmers looking into diversifying their land and business in order to secure a more financially stable future it can leave you questioning what new ways can you expand your business, especially when so many markets seem over saturated. However, there are new trends and ideas being developed all the time, below we talk about the trends we are seeing in farming diversification.
Even in uncertain economic times, farm land will be one of the most valuable commodities that farmers deal with. Whether you are buying or selling there are simple steps you can take to protect yourself, minimise liability and maximise value. Vicky Hernandez, Director and Head of Property at Hedges Law, has some top tips.
- Understand what you are buying/selling and the appropriate structure
Most land is held as a separate asset and is sold by one individual or farming partnership direct to another. However, this may not be the most cost-effective way to transfer land. Some land may be owned by a company, for example, and it might be more tax efficient to buy and sell the shares in that company instead of the land itself. Transactions can be as simple or complex as the parties choose to make them, but it is worth considering all the options before settling on an agreed way forward
You have decided upon your diversification project but your proposed development will require you to recover possession of land that is currently occupied by a tenant or licensee. What steps do you need to take?
If your land is agricultural land then your tenant is likely to be occupying as an agricultural tenant either under an agricultural holding under the Agricultural Holdings Act 1986 or a farm business tenancy under the Agricultural Tenancies Act 1995.
If your tenant has a farm business tenancy (FBT) the agreement might also include a break clause that entitles you to bring it to an end early. If there is no break clause then you will need to consider the appropriate method for bringing it to an end and this will depend on whether it is a fixed term tenancy or a periodic tenancy and on the length of the tenancy term or duration of the periods, as different rules will apply.
Matt McWhirter, of Farmers and Mercantile Insurance Brokers (FMIB), explores the opportunities and risks associated with diversification and explains why farmers should think before they diversify
Market volatility, slashed subsidies, and economic uncertainty have all played a hand in farmers looking further afield to seek out new revenue streams.
With plentiful resources at their disposal, farmers are increasingly turning to diversification and successfully launching enterprises up and down the country.
From rural tourism to renewable energy schemes, more than two thirds (66 per cent) of farm businesses in England have diversified, according to the latest Farm Business Survey.
In these uncertain times it is more important than ever for farm owners to be adaptable and move quickly to take advantage of potential income streams. Exploring diverse uses of land is vital to ensure the future of any farm but Vicky Hernandez, Director and head of property at Hedges Law warns that farmers should be careful not to rush into things without ensuring they are properly protected.
Historically farmers have liked to do business on a handshake, but times are changing and we are seeing more disputes arise. If you allow a third party to use your land for a new venture, consider putting a simple document in place so the terms of that occupation are clear; in the excitement of a new project the parties can sometimes forget that things may not always go to plan and it is far easier to agree the basis on which someone is going to occupy your land when the position is amicable than after a dispute occurs.
he revised sentencing guidelines for health and safety offences, introduced in February 2016, has meant greatly increased fines for offences across all sectors, including agriculture. Helen Devery, head of health & safety and partner at law firm BLM, explores the impact the guidelines continue to have on organisations and individuals within farming.
The new guidelines mean that organisational safety has been put into sharp focus and hefty fines are promised for those companies failing to protect employees against known and preventable safety risks. Since then, fine values have rocketed – in farming, this has seen some fines reach £400,000.
Diversification is prominent within the agricultural community across the country. With relentless pressure on yields coupled with uncertainty over the future of rural subsidies, many farmers and landowners are new looking at how to expand their business and generate new revenues.
This is where residential and commercial development plays a role. Many farmers and landowners look to develop strategic, large-scale parcels of land with a regional developer or, for smaller scale projects of five to ten homes, or indeed for a conversion project, with a local house builder.
With an ever-growing demand for homes, or commercial premises in rural settings, the agricultural community is well-placed to harness land – arguably the most valuable asset – to create generation-changing opportunities.
This has traditionally involved the change of use of land or buildings to form tourist accommodation, and more recently has included renewable energy schemes.
One the Group’s more unusual projects was to gain planning consent for the conversion of redundant farm buildings to form a cookery school with associated tourism accommodation at Highfield Farm, East Riding of Yorkshire.
Another was at Easton Farm, Bridlington, where we provided lead planning advice on a large farm diversification project that entailed the conversion of existing farm buildings and new build units to form 28 holiday homes. Pegasus Group was involved in the conception and project management of the proposals resulting in the scheme being granted permission, overcoming issues of sustainable development and impact upon the landscape.
Rural theft is threatening the livelihoods of farmers up and down the country. Kelly Friel, Digital Product Manager at tools, DIY and security accessory supplier Zoro, offers her advice for improving security and reducing your chances of falling victim to thieves.
If you work on or own a farm, you’ll already know just how serious the ongoing problem of rural theft is becoming. Expensive agricultural equipment is an appealing prospect for thieves, and the fact that farms are almost always in remote locations far from the emergency services makes criminals more brazen in their attempts to break in.