Planning succession to farms
Farms and land have traditionally stayed in families for years being passed down from one generation to the next on death. More recently, social and economic changes have meant farm businesses are being transferred to the next generation during the owner’s lifetime. This can be for financial or practical reasons but sometimes the transition is sudden or unplanned, especially if illness is at the core. It is therefore important that current owners consider the many options available should arrangements need to be made to ensure your wishes for the future ownership of your farm business are carried out.
It is important that you make and regularly update your Will. If you do not, your estate will be divided according to the rules of intestacy, between a number of relatives. This can cause disputes within families and the break-up of the farm business. In addition, the absence of a will can result in a delay in the payment of money due to the farm business pending a legal decision.
The benefits of making a Will:
• to provide certainty and clarity regarding the division of your estate
• avoidance of disputes and delays
• ensure Farm Business Assets pass to the person you intend
(Assets include; land, buildings, livestock, plant and machinery, milk quota, entitlement to Single Farm Payment and any entitlement to grant payments under schemes such as the Countryside Management Scheme or the Farm Woodland Grant Scheme).
It is also important that your Will is regularly updated if there have been changes to your business or your personal circumstances.
Inheritance Tax
Until recently, agricultural land and other farm business assets were largely exempt from Inheritance Tax. However recent changes such as the increase in property prices, the number of second dwellings on farms and the Single Farm Payment has impacted on this.
We will help you to carefully considering these issues along with tax relief with when you make or review your Will.
For further information or advice about Agricultural Law please email agriculture@bartlettschester.co.uk