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Legal support for agriculture businesses

We're delighted to announce that we are offering farming businesses a free legal health check to support the agricultural sector.

The interactive, online questionnaire, which should take users no longer than 20 minutes to complete, aims to identify and highlight any potential issues and legal gaps that may need addressing to safeguard a farming business’ future – providing certainty and security for forthcoming generations. 

This includes family arrangements – partnership issues, wills, family agreements and potential disputes – and diversification, supplier contracts, renewable energy schemes (for example solar), and business aspirations. 

Head of agriculture Peter Snodgrass, who advises his farming clients on a wide variety of matters from partnerships to agricultural tenancies, said: “A regular review of your business and family affairs is good practice as circumstances and business goals change over time. 

“We want to help you review your current arrangements and highlight any areas where further advice, support or action could be beneficial or required to ensure you meet your objectives and have peace of mind that all arrangements are up to date. 

“Completing the user-friendly questionnaire will help provide our team with the information they need to best identify any areas of concern. Once submitted, we will review your responses and call you to arrange a free consultation meeting with one of our agriculture specialists.” 

Last month, we expanded the size of our agricultural law team to meet growing demand for its specialist legal services, including the appointments of partner Amy Cowdell, legal director Jennie Wheildon and solicitor Kimberley Brookes – bringing with them more than 30 years’ combined experience. 

Peter said: “Agricultural law is a niche but highly sought-after and prestigious area of law. We are continuing to expand the team with the aim of building a centre of excellence in the country that is able to support farming businesses with all their legal requirements.” 

Complete the farming health check today

Get In Contact

Peter advises his farming and landowning clients on a wide variety of matters from partnerships to agricultural tenancies.

The legal requirements of the agricultural sector can be complex and you need a team who are real experts in agriculture law – lawyers that understand and have experience of the issues affecting you and your business.

Our agriculture law team supports and advises farmers, landowners, producers, landlords and tenants on all types of issues affecting this vibrant and challenging sector.

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Our latest edition of Life Times magazine

Our Autumn Edition of Life Times is Out Now

We bring you the autumn edition of Life Times magazine - a round-up of insightful and informative content.

From looking at how to access the First Homes scheme, to resolving relationship disputes out of court, and Inheritance – A gift or a curse? The autumn issue is packed full of useful tips and information.

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Blog

Agricultural partnerships: top three considerations

The agricultural partnership is a common and often effective legal business structure that can be used by families to run their farm.

Despite being popular in farming communities they can cause confusion, especially when life muddles the situation. So, what should people consider when joining or creating an agricultural partnership?

The importance of a clear partnership agreement

Agricultural partnerships, just like any partnership, carry both successes and liabilities and anyone considering entering into one must keep this in mind.

Partnerships require ‘utmost good faith’ from the partners.

One of the most serious problems, which is often not dealt with, concerns ownership of farm assets - and the farm freehold in particular. This is a technical area, but of great significance in practice if a partner needs paying out for his or her share. This can happen on the death or retirement of a partner, or on the divorce of a partner.

Firstly, a partnership agreement should state whether the farm is a partnership asset or held outside the partnership. Secondly, it should say which partners have a share in the farm, and how any gain in value should be allocated between them.  Farms have increased in value hugely over the last 20 years and several cases have come to court because there was no clarity about this issue.

Although these things seem simple, they are often neglected.

Contracts can also be used to manage the termination process. Often, clauses state that a partner leaving the partnership can be paid out over a number of years, so as to enable the remaining partners to re-trench.

Using partnership agreements to support the family

For many generations, farming families have used partnerships as a way to bring the younger generation into the business. Bringing younger family members into the partnership can aid development and provide next generation farmers with life experience, income, and a stake in the family business.

The key point here is to get clarity on partnership rights, including ownership of assets while there are no significant family tensions.  Once a dispute has started, it is too late.

Hopefully there never will be a ‘bust-up’, but if there is, the well-drafted agreement will save much stress and money. However, it is very helpful for a family to agree what their rights and duties are, so that there are no surprises down the line.  Therefore, if a partner leaves the partnership in happy circumstances, there should be little reason for dispute about what they are entitled to from the partnership.

Some partnership agreements sometimes require pre-nuptial agreements from newly married partners to protect the farm assets should a divorce take place.

It is also common to stipulate what happens when a party is no longer of sound body or mind, so putting in place a lasting power of attorney and will, and updating them as needed, is also something that should be strongly considered.

Ensure your accountant and solicitor sing from the same hymn sheet

It is essential that your partnership agreement ‘agrees’ with your farm accounts. This is where many arrangements fall down - and court cases follow. However, the remedy to this is simple – ensure your solicitor communicates with your accountant so that you end up in a joined-up and consistent position.

We're here to help

It can be easy to get carried away by the excitement of beginning a new chapter for the family farm, but people must consider partnership agreements carefully, with the business’ best interests in mind. Having a clear agreement that covers all eventualities will ensure that the partnership brings security and prosperity to the farming community.

Download our free webinar on farm partnerships for further guidance on how they’re used successfully by farming families.

For more information, advice or support please contact Peter Snodgrass or Jennie Wheildon in our dedicated agriculture team.

Our agriculture team is ranked as a Leading Firm in the Legal 500 2021 edition.

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Flood defence provision: what landowners need to know

Climate change has led to an increase in flooding incidents over recent years, making it more important than ever for landowners to protect their land and the interests of those around them.

However, the issue of when a landowner is responsible for flood defence provision, or when it falls to local or public authorities is often unclear. So, what are landowners’ obligations and what are their rights if they experience flood damage?

Increasing concern

A recent study by Greenpeace identified widespread problems throughout the national flood defence network. It highlighted that across the country in 2019/20, as many as 3,460 ‘high consequence’ assets were rated as being in a poor or very poor condition.

With resources becoming more stretched, the powers that public authorities wield to address flood risks are often balanced in favour of protection of homes rather than farmland. Consequently, this increasingly leaves landowners at risk.

Who is responsible for flood defences?

Individual landowners have duties known as ‘riparian’ duties. This regards the maintenance and upkeep of the watercourses forming the boundary to their property or running through their land.

Breach of these duties means that landowners can be found liable for flooding incidents on neighbouring land. Equally, whilst the common law recognises natural flooding as a ‘common enemy’, this does not allow the unreasonable diversion of flooding onto neighbouring land.

Other considerations for landowners

Landowners still have a measured duty to protect those surrounding them, which depend on several factors, including:

  • The topography and use of their land
  • The extent of the flooding risk to any neighbouring land
  • The foreseeability of any damage and the nature of any development of their land

Other factors to consider include whether water is stored or free-draining, and the effects of any manmade structures, such as drains or culverts.

When does responsibility fall to public authorities?

The Environment Agency (EA) can also hold responsibility for maintaining and managing watercourses, principally main rivers, and national flood risk management.  Local authorities and internal drainage boards are usually responsible for maintaining ordinary watercourses which are not privately owned.

It is difficult to establish liability against a public authority where their inactions (such as a failure to maintain) causes flooding.  This is because public authorities have powers rather than obligations, and their powers are weighted towards preservation and protection of homes and property.  However, there is currently no clear legal position surrounding when authorities are the owner of a watercourse and may be considered to have riparian duties.

It is possible for public authorities to be found liable for flooding where their actions have caused or exacerbated flooding risk. They may also be liable to pay compensation where their exercise of flood defence or drainage powers have caused flooding damage.

Seeking help

Any concerns around flood alleviation works, or the maintenance of watercourses, should be raised with the relevant public body at the earliest possible opportunity. As a landowner, seeking support from agricultural law specialists whilst doing so can help ensure you stay on the right side of the law.

Flooding is a threat that you will continue to contend with, so an understanding of your rights and obligations regarding water management affecting your land is crucial.

If you need advice or guidance on your obligations, or your rights if you have experienced flood damage on your land, then contact Jonathan Stork in our agricultural team.

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Escaping city life? Our top tips for buying a rural property

The pandemic has caused a shift in people’s perspectives when it comes to their home. As a result, having access to green space and more square footage has become top of the priority list, meaning people are now looking to the British countryside for their next big move. Moreover, research even suggests London’s population could drop over the coming years as a result.

With this in mind, what do those looking to swap the Big Smoke for country living need to know?

Staying connected

Remote locations often lack the same level of connectivity that people take for granted in urban settings. Therefore, for those who rely on technology for work, or day-to-day life in general, this could be a considerable issue. Consequently, homeowners should check the status of essential utilities before making a decision, including:

  • Water and drainage connections
  • Energy supply infrastructure
  • Mobile signal strength
  • High-speed internet availability
Not all roads are the same

Although most roads in the UK are adopted, which means they are maintained by the local authority, remote rural properties may be served by private tracks or unadopted roads.

For example, private tracks are maintained by the homeowner or a group of neighbours, which could lead to disputes over who is responsible for tasks such as repairing or even gritting the road.  Therefore it is important to understand who is legally responsible for the access, your ability to enforce those obligations and any costs associated with it before you buy.

Get to know the location

If a property is located within a conservation area, or an Area of Outstanding Natural Beauty, there may be restrictions on the alterations that you can make to the property. Therefore, if isolated bliss is what you are after, information about potential development schemes in the area is going to be important.

Most importantly, knowing the location and associated restrictions beforehand could prove an important cost saving exercise in the purchasing journey. Your solicitors will be able to provide guidance around any planning designations, pre-existing covenants or proposed development before you buy.

The price isn’t always right

As a result of an increasing number of people looking to buy homes in rural settings, listing prices could become inflated as sellers try to take advantage of the rise in desirability. By building relationships with local selling agents, you can receive alerts on properties before they come to market and hopefully steal a march on any other interested parties.

Test the waters

If an area seems ideal but there are still feelings of hesitation, renting first can be a simple solution. That way you can get a feel of the location, and identify both the positives and the negatives, without having to make a long-term financial commitment to the purchase of a property.

Find the right support

Solicitors specialising in rural conveyancing are a vital asset to have when purchasing a country property. By assessing the property with a practical eye, they can help to unearth any legal issues early on, ensuring homeowners avoid any unexpected bills or responsibilities in the future.

In conclusion, whether it’s a farm, country cottage, or plot of land, understanding the ins and outs of the area and the property is an essential step in securing the rural dream.

We understand that buying or selling a house and moving home can be stressful. If you’re about to buy a new property then our dedicated residential conveyancing team can help. For guidance and support complete our 'contact us' form and a member of our team will call you back to discuss your enquiry.

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Guides & Advice

An Act of Plenty – The Agriculture Act 2020

In November 2020 the long awaited Agriculture Act 2020 finally gained royal assent after what seems to have been a long and winding road.

The NFU has described it as a ‘landmark moment for Post–Brexit farming’, and it sets a new direction of travel for the agricultural sector in the UK.

So how will the new Act change things?
Financial support

One of the key parts of the legislation is the way those in and supporting farming will access financial assistance in the future and that financial assistance available will be linked with improving climate change and the environment and in farming sustainably.

Unlike the Subsidy Payment from the EU, this financial assistance is designed to flex and change through time. Bite-size alerts with further updates will be released over the coming year.

Over the next seven years, the European subsidy basic payment scheme will be phased out with direct payments over the next four years being reduced by 50%. This phasing system has been introduced to give those that rely on the payment time to plan for a future without it. However, it is possible to start planning for this now.

As part of the Act, the UK Government is introducing schemes which will provide subsidy payments to farmers, such as the Environmental Land Management (ELM) scheme.  It is important to remember however that these are not b a replacement of the basic payment scheme. The ELM Scheme has been founded on the principle of ‘public goods for public money’, the aim is to help deliver the Government’s ambitious 25 year environment plan and to help meet the target of net zero emissions by 2050, whilst also supporting the rural economy.

Farmers and farm managers will see subsidies made for delivering public goods that do not necessarily have an obvious market value such as;

- clean air,
- clean and plentiful water,
- plans for thriving wildlife,
- protection from environmental hazards,
- engagement with the environment and
- reduction of, and adaption to climate change.

 

It is also expected that penalties for any breach are likely to be smaller and more proportionate than those that have seen with the outgoing European legislation, and of course, there will be no oversight by the EU (which has always been in the minds of DEFRA inspectors).

The ELM scheme will be fully rolled out by 2024 although various trials are already taking place. The aim is to see all farmers in a position where they can access sustainable farming incentives but for the larger landholdings and Estates, there will be some big-ticket items available for landscape recovery.

What can be done to prepare?

Planning and preparation will be key and now a good time to have conversations about the future of farms and estates. A number of organisations are already inviting farmers to join together to provide data that will ultimately help to inform the policy and regulation which will affect the sector over the next seven years.   Farmers are being encouraged to consult and collaborate as part of the co-design of this policy and key to this will be talking with family and neighbours to consider how the business structures can be more efficient, improve climate change and adapt to reduce carbon emissions and ultimately access financial support as a result.

Food Production and Sustainability

The Agriculture Act does not specifically reference food production as something that will receive subsidy. The Government will be continually monitoring our food standards and sustainability with three yearly reviews.  However, whilst this is considered a positive move there is still some discord that there is no mention of imposing UK food standards on imported food.

However, for the first time for many decades, there is now a requirement for the Government to regularly review our national food production against consumption: food security is back on the map, and indicates a revived concern about its ability to feed the nation from production within UK borders.

Contract terms will play an ever-increasing part

There is much discussion about the need to recognise food for wellbeing and not just as an economic commodity and to some extent the COVID-19 pandemic has reinforced the importance of the food supply chain: that basic need to ensure that we as a nation are fed. But ultimately the Act itself places reliance on these supply chains and lays the foundation for this by writing provision to ensure fair contract terms can be struck within these supply chains.  To make the most of this farmers will need to look longer and harder at technology to see how investment in this can increase productivity and reduce overheads, as well as looking at and considering contract terms carefully to make sure they reflect legislation – and work for your business.

Is this time to exit?

For those farmers that are not interested in or don’t have the appetite to engage in the new schemes, for a variety of reasons, it is recognised that they may ultimately choose to exit the sector.  There are proposals to roll up basic payment scheme entitlement payments into one exit payment although HMRC is still considering the tax implications for this.  Again this offers a good opportunity to sit down and consider with family and advisers the future of the farm and farming business to ensure all assistance available is fully explored.

Tenancy Reform

Finally, we see the Act bring changes to the agricultural tenancies, paving the way for further overdue tenancy reform, encouraging landowners to provide longer-term farm business tenancies and agricultural tenants to feel secure in discussing diversification options with their landowner – without the risk of losing security. This is going to prove important in making the natural capital investment and bringing about the environmental changes governmental policy requires.  None of this can be successfully achieved on standard two or three year tenancy agreements or where tenants are unable to change and improve their farming methods due to outdated tenancy provisions.

To round up

The long awaited Act together with the coronavirus pandemic and Brexit has resulted in a turbulent and uncertain time for the sector.  However, profound change is happening and this is a perfect opportunity for all involved in the agricultural sector to take stock, reflect, discuss and plan for the future.   Unlocking the support payments available will be key to future plans and whilst the details are not yet available planning and preparation, finding opportunities to collaborate with new initiatives and share in the financial support available will be crucial to the survival and future in the new post-Brexit world.

Contact us

To help you navigate challenges contact Jennie Wheildon or another member of the agriculture team in your local office.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

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Agriculture: diversifying or leasing your land to create habitat banks

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Guides & Advice

COVID-19: Challenges and opportunities for farms, farming and landowners

COVID-19: Challenges and opportunities for farms, farming and landowners

The current COVID-19 situation is proving to be a challenge for everyone, and particularly for farmers, at a time when they are already having to adapt to the prospect of reduced support payments as the basic payment scheme is phased out and replaced by the English Land Management Scheme (in England).

Immediate issues such as labour shortages for the horticulture, fruit and vegetable producers are putting massive pressure on those sectors with Prince Charles now adding his voice to those calling for a new ‘Land Army’ of British workers to do the picking and other work more recently associated with eastern EU seasonal workers.  At least garden centres are now able to open – an overdue measure, many would say, to benefit the producers and plant retailers and the population at large.

Such challenges may lead to agricultural landowners considering their long term options for their land, and the development opportunities that may be open to them.   However, this will bring into focus other considerations too, such as the potential tax implications and farm and land ownership.

What are the options available for agricultural land development?

Agricultural land is varied in terms of its suitability for development and as such the time frames for development are also wide ranging.  Land close to existing settlements could be considered for immediate development with a short term option or contract for sale being entered into with a developer.

For land that is some distance from existing settlements however, a more strategic approach is needed, enabling land to be brought forward for development whilst allowing farming uses to continue, protecting an income for the landowners, while any development proposals are progressed.

Residential development is often the aim for landowners but there are situations where land is just not suitable for residential development or doesn’t give the best return. Commercial development should not be discounted.  Depending on the location of the land, e.g. along the HS2 route or other infrastructure projects, this could be an attractive option.

Implications for your tax and wealth planning

Any changes to, and development of land, will have tax and wealth implications from a business and personal perspective and this should be part of the planning process at an early stage, which will shape your potential route to development.  Areas to consider include: how do you ensure that tax reliefs can be claimed on a sale of land with planning permission?  Could it be time to pass assets to the next generation? Who in the family is going to work on the farm, and who will be elsewhere?  As with many areas of tax legislation, guidance and reliefs are changing all the time.

Farm ownership

Strategic development of any land will, by its very nature, take time to come to fruition but deals can be delayed by existing farming arrangements and partnership agreements. To expedite any project it’s important to have clarity over ownership of the farm and other assets.

This can be overlooked until a disagreement arises or an event, such as a death occurs, at which point it can be very difficult to find agreement, especially when the values involved are high, as they usually are.  It is particularly important that the accounts are kept in accordance with the partnership agreement and if there is no written partnership agreement, now is the time to draw one up.

When considering land development there are many potential routes forward and many more implications of those decisions to be considered, to find the best approach to pursue.

Contact us
To help you navigate these challenges and discuss your available options and what is right for you, contact Peter Snodgrass, Joanna Deffley or Louise Ingram or another member of the agriculture and development team in your local office.

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Our thoughts

All the latest views and insights on current topics.

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