If you are planning to sell your farm or agricultural estate, you need to consider several legal, practical and financial issues from the outset to prevent unwelcome surprises that could lead to unnecessary delays.
Whether it is gathering the necessary information, rectifying title issues or protecting family members, our specialist Agriculture and Rural Affairs team are available to guide you through the transaction from start to finish.
A successful sale starts with good preparation. Agricultural property transactions involve more considerations and complications than a typical property sale, these can be navigated confidently with early planning and clear advice.
Here, we highlight some of the key issues to consider:
Establishing ownership
You will need a copy of the title register and plan from HM Land Registry confirming the extent of the land you are selling and in who’s name(s) it is registered and we can obtain this for you. The title will detail any third party rights of way over the land and any restrictive covenants affecting its use, for example. It may also be the case that the property is unregistered and the historic title deeds need to be located.
If we identify any title defects, eg. missing or incorrect plans or unregistered rights of way, these will need promptly resolving. These can particularly arise where a farm has been owned by many generations or where there has been a prior sale of part or title split.
The sale will usually be by the registered legal owners as seller. Or if, for example, a registered owner has died, the executor will be named as a seller and we will need to ask for the grant of probate. You may also be selling as a farming partnership, and it is important to clarify this at the outset so that there are no surprises later.
Information and documentation
You will need to gather other information relating to the use and occupation of the land and property, such as tenancy agreements, grazing licences, participation in environmental schemes and stewardship agreements. If there are informal or oral tenancy arrangements in place, it is important to clarify the terms of these prior to a sale.
Where building works have been carried out, make sure you have relevant planning permissions, building regulation certificates and any listed building consents, as well as any drainage maps and information about private water supplies. Your land agent may well be able to assist in this regard.
Occupational rights
If someone has an interest under an agricultural tenancy or a farm tenancy agreement, we may need to clarify formal notice requirements and (if not yet done) initiate the process to obtain vacant possession.
Boundary and access issues
You will need to disclose any issues or disputes relating to your boundaries or access to the land or to neighbouring land. The purchaser will be looking for certainty and that any disputes or misunderstandings are resolved before exchange takes place.
Expert help from rural land surveyors may become necessary but we will discuss this with you if it becomes an issue.
Retained land
If you are planning to retain part of the land, we will need to ensure appropriate rights and covenants are incorporated into the transfer deed. You will need, for example, to consider if you need a right of access across the land you are not selling or rights to shared services.
And if the property is mortgaged, you will need to discuss your intentions with your lender to secure a release of the portion to be sold off from the lender’s security. As part of the transaction, we will of course be able to liaise with your lender directly in this regard,
Environmental matters
Farmers are under pressure from the environmental regulators; navigating the increasing regulatory burden is not easy. However, you will need to gather documentation demonstrating compliance with, for example, waste exemptions and slurry storage, as well as participation in environmental schemes affecting your farm. Providing prospective buyers with as much information as possible can speed up the overall transaction as it reduces the number of bespoke enquiries they may raise.
Tax planning
The potential tax implications for owners of agricultural and farming land have deepened, particularly with the recent changes affecting the availability of agricultural and business property relief (APR and BPR) for inheritance tax. Reliefs and exemptions on capital gains tax (CGT) have also been watered down.
Our specialist Tax team work closely alongside the Agriculture and Rural Affairs team and is experienced in advising on CGT, APR/BPR, inheritance tax and how other taxes and reliefs may impact them. You may also want to consider whether a pre-sale restructuring of your ownership could mitigate your tax liabilities, while still protecting your interests and those of your loved ones.
Get expert help
It is vital to seek expert professional help from the outset from specialist rural solicitors as well as accountants and surveyors.
Our experienced Agriculture and Rural Affairs team supports and represents tenant farmers and landlords in Worcestershire, Shropshire and the surrounding regions.
Please contact Lauren Collins, a solicitor in the team, on 01905 610410; or email her at lauren.collins@mfgsolicitors.com