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James Goddard is Partner in the Commercial Property and Agricultural Law team at North-West based law firm SAS Daniels. Below he talks about Farm Diversification and what farm owners must consider before diversifying their land;
Many farm owners are looking to alternative ways to use their land as traditional farming continues to evolve. Food supplies are currently in high demand but farm owners need to think ahead and plan for the long term, beyond the current crisis.
Diversifying is the perfect way for landowners to create another revenue stream and get the most out of their land. Farm diversification can include everything from moving into organic or free-range produce, through to something more drastic such as opening a brewery. All of these are forms of diversification that can prove to be transformative for farm owners but before farm owners look into new enterprises, they must consider why they want to diversify, and how they can go about it.
Here agricultural paralegal Emma Mennell, part of the friendly Agricultural Team at Pearsons & Ward, gives her take on farm diversification and what to watch out for…
The total income from farm diversification activities on farms in the UK was £740m in 2018/2019. Therefore the financial benefits of diversifying into the leisure industry means that a farmer can supplement the farm’s income and make more money from the farm’s asset’s than they would yield from traditional farming methods. It is therefore no wonder that conversions of barns to wedding venues, farm cafés, open farms and equestrian yards are on the rise.
A consultation into reforms to agricultural tenancy law is seeking to remove some of the barriers into the industry currently triggered by legacy agreements under the outdated Agricultural Holdings Act 1986. With around a third of agricultural land in England currently let under a wide number of different agreements, widespread tenancy reform is believed to be pivotal to attracting the next generation of farmers.
Every industry faces a different set of challenges and the farming industry is no exception, its particular challenges can be fluid and varied, with changes in the economic environment having an impact. Ultimately, farms have to be run as efficiently as any other business, and key to that success is being able to weather any storm. Taking regular legal advice can be a valuable way to identify how a farm can diversify away from its core farming activities and into other areas, including possibly making effective use of redundant farm buildings to create a new revenue stream.
Anne Elliott, CEO of Latimer Hinks Solicitors, discusses Agricultural Property Relief (APR) and Business Property Relief (BPR) in regards to estate planning. …
As a solicitor who works with a significant number of agricultural families and business owners in the North East, I regularly discuss and advise on the use of APR and BPR when estate planning. At present, they are very generous to the taxpayer. However for a number of years there has been a threat of reviewing and limiting reliefs.
The summer is an excellent time to review whether or not you are making the best use of APR and BPR, as significant financial legislation is often reviewed in the Autumn Budget.
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.
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