Legal advice articles
With a farming heritage spanning 170 years, Rural Hub Business Supporter Wright Hassall in Leamington Spa is one of the long-established agricultural law firms. Their agricultural solicitors advise farmers, landowners, farming businesses and farming-related organisations on all their legal matters. The Wright Hassall Head of Agriculture, Alexandra Robinson, is a Director of the Rural Hub.
Solicitors from Rural Hub Business Supporter, Shakespeare Martineau, can offer support on all aspects of agricultural and family law. Their team also includes litigation specialists ensuring that when a dispute arises, over such things as boundaries, farming family issues or land, they have the skills and experience to ensure you are properly protected and we keep the bigger picture in mind. Shakespeare Martineau is ranked in Band 1 in the Chambers UK Guide 2022 for agriculture and rural affairs.
Visit this page for regular legal articles covering different aspects of working in agriculture.
Levelling up rural Britain: new planning proposals
By Rebecca Mushing, an Associate at Wright Hassall
For those of you hoping that the government’s much vaunted levelling up policy will reach non-urban areas, you’ll be delighted to hear that Defra has launched its latest policy paper ‘Unleashing Rural Opportunity’ containing, among other suggestions, five key planning proposals designed to help” grow the rural economy. At first reading (and second) it all sounds a bit vague – a proposal ‘to consult’; a commitment to ‘explore’; and a promise ‘to consider’. Of the five proposals, only one (to provide £2.5m funding for a network of ‘rural housing’ enablers to help boost the supply of rural housing) appears – sort of – definite. There is a degree of déjà vu here – various bodies including the CLA and CPRE have been agitating for a housing and employment policies that reflect the actual requirements of the rural population rather than those ‘designed for urban areas and not rural circumstances.’ [Responses to the 2016 Rural Planning Review]. Defra’s proposals are to:
- Consult on making it easier to convert redundant agricultural buildings to residential.
- Consult on wider changes to permitted development to support farm diversification.
- Introduce a new network of rural housing enablers (to act as ‘honest brokers’ between developers and local authorities, backed by £2.5m funding).
- Explore additional measures to unlock more small-scale rural housing.
- Consider if local planning authorities need more rural-specific training.
The general view of interested parties such as the CLA, NFU and CPRE is that we’ve already been here – the government already has plenty of evidence about what rural communities really need in order to boost economic productivity. One such need is for Local Planning Authorities to change the way they apply planning regulations, as outlined very clearly by two reports commissioned by the All Party Parliamentary Group for Rural Business and the Rural Powerhouse. Both reports provide valuable background into the reality of rural life, outlining the disconnect between what is actually needed in terms of housing and employment development and how the National Planning Policy Framework (NPPF) is applied, and both are worth reading in the context of Defra’s proposed changes. Farm diversification, another important element of rural economic development, is also in danger of being curtailed by what the CLA describes as a desire by a vocal, influential minority to preserve rural areas in ‘aspic’ and also, and as importantly, by the tax system which needs to be addressed as a matter of some urgency ( although the government is currently consulting on this). In reality, the government shouldn’t need additional policy papers and commitments to consult – the work has already been done and the evidence is clear. Defra’s latest proposals will simply add more delay and dither.
To read this article in full, please visit the Wright Hassall website.
Biodiversity Net Gain – new income stream for farmers
By Rebecca Mushing, an Associate at Wright Hassall
We now have more detail on how landowners and farmers can profit from legislation coming into force in November 2023 that requires developers to improve the biodiversity of most new developments (there are some exemptions) by a minimum of 10%. Although developers are being encouraged to find biodiversity net gain improvements onsite, many will have to look beyond, potentially giving farmers the opportunity to profit directly by making marginal or less productive land pay through the sale of biodiversity units (BUs) as well as being able to register suitable habitats on Natural England’s Biodiversity Gain Site Register.
However, as with any new initiative, there are challenges. Agreements must be for a minimum of 30 years and be legally binding either via a planning obligation (s.106) or a conservation covenant in return for payment from the developer. These agreements will also be binding on successors in title. There are tax considerations too, currently the subject of a government consultation which is seeking views on how – and if – APR (and / or BPR) should apply to land not in agricultural production.
Despite the potential risks, particularly tax and the length of time these agreements must last, the current level of development is not showing any signs of slowing so BNG should represent a significant income stream that few farmers will be able to ignore. To read the full article, please visit our website.
Have you had some agricultural land allocated under a local authority plan?
Planning involves making decisions about the future of our cities, towns and countryside. This is vital to balance our desire to develop the areas where we live and work with ensuring the surrounding environment isn’t negatively affected for everyone. It includes considering the sustainable needs of future communities.
Local planning authorities must prepare a local plan which sets planning policies in a local authority area. These are very important when deciding planning applications. But what if some of your agricultural land has been allocated under your local authority plan? Listen to the 26 minute podcast below from Shakespeare Martineau for advice on the next steps available to you.
Partnership Pitfalls of Family Farming Businesses
Family members involved in farming operations may unwittingly create various partnerships over many years. These have significant legal consequences that may only become apparent in a moment of crisis, such as the death of a family member or a family fallout. To avoid protracted disputes and further breakdown of relationships, it is always advisable to ensure that partnership agreements and wills are consistent and correctly reflect the intentions of the parties.
Unlike companies, partnerships do not have to be registered. If people carry on business together with a view to a making a profit, they enter a partnership even if they do not consciously agree to this. Each time a family member stops being part of a farming business – by choice, or because of death or a dispute – that particular partnership ceases to exist, and a new partnership is created between the remaining family members who continue to run the business. Over decades several different partnerships may be involved in running a farm.
Knowing that your farm business is a partnership is important as the partners personally share responsibility for the debts and obligations of the farm. Each partner also pays personal tax on his or her share of the partnership’s profits. Usually, whatever is brought into a partnership or acquired by the business is partnership property, although this does not necessarily apply to the farmland itself. An individual may continue to own the land but allow it to be occupied and used by the farm business. However, if the land is included on the balance sheet of the partnership, it could be deemed that the intention was to transfer ownership from the individual to the partnership. Assessing the correct position may be complicated if children who have joined the farming business have been promised that they will become the owners of the farm. They may assume that even if the land is not a partnership asset it is their inheritance. But, unless the landowner’s will properly reflects this understanding, they will not automatically become owners of the land.
After years of working harmoniously together, a farming family may be thrown into crisis if promises or expectations are not met after a sudden falling out or on the death of a family member. If disagreements cannot be resolved, there may have no choice but to take the matter to court. A family farming together cannot avoid being a partnership but can avert legal action by ensuring that their business is set up as they intend.
A written partnership agreement will avoid disputes and govern what happens if the parties’ relationship breaks down. It will also enable a farm business to receive bank loans and allow it to be eligible for various types of tax relief. Keeping existing partnership agreements up to date is essential, as is ensuring that partners’ individual wills reflect the partnership agreement. Seeking professional assistance to prepare partnership agreements and wills – before problems arise or surprises come to light – is likely to be money well spent.
Parminder Takhar is an Associate at Wright Hassall specialising in advising on disputes relating to commercial contracts, and director, shareholder, and partnership disagreements.
Partnership Voluntary Arrangements: a practical option for an insolvent farm
Farming is one of the very few sectors where most businesses still operate as partnerships. The options available if a farm becomes insolvent are therefore much more complex than in the case of limited companies or individuals. An alternative to winding up/bankruptcy, which also enables a farm to continue trading, may be a Partnership Voluntary Arrangement. Farms in financial distress should consider exploring this option.
The law assumes that people conducting a business together, such as a farm, are in partnership, whether or not they have a formal written agreement. All partners share the profits of the business but are also responsible for the business debts. To protect individual partners from personal liability, a Limited Liability Partnership (LLP) may be established.
The author of this article, Elizabeth Taylor, is a specialist insolvency lawyer at Wright Hassall acting for insolvency practitioners, directors and debtors in pursuing and defending Insolvency Act claims.
Please click here to read the full version of this article on the Wright Hassall website.
Farms in financial distress: insolvency is not inevitable
Farm business owners and the whole of the agricultural sector are currently experiencing a range of pressures, mostly because of factors outside their control. Many farms are operating at their financial limits, and the resultant economic problems for farmers, their businesses and their families are causing a great deal of distress. The earlier you seek professional advice the more solutions may be available to your business. As farm businesses by their nature hold considerable assets there may be various options for loans, asset finance or increased overdrafts, secured by these assets. Professional advisers will assess your financial statements to ensure that such an option is a good one for you and your business. Please click here to read the full version of this article on the Wright Hassall website.
The author, Caroline Benfield, is a partner at Wright Hassall and advises on all aspects of contentious and non-contentious personal and corporate insolvency matters.
What to do when accidents happen on farm
Good health and safety practice is an essential part of a sustainable farming business. Considering risks and managing these should reduce the occurrence of incidents, and the resultant financial and personal costs. Drawing up an emergency response plan will give clear direction at a time of shock and confusion. Making a solicitor one key contact in the first instance may provide invaluable expert assistance throughout the process. This plan should be reviewed regularly. The farm should also ensure that there are several qualified first aiders within the workplace, and that there is an accident book where all injuries are recorded , , ,
You can read the remainder of this article by James Lowe, Regulatory Partner, on the Wright Hassall website.
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