Farmer tenancy succession rules in England updated

Succession rights in three-generation farm tenancies have changed, with applicants no longer ruled out because they farm another holding.

The change applies to Agricultural Holdings Act 1986 tenancies with rights of succession to two further generations.

See also: Changes to farm tenancy succession – what you need to know

From 1 September, applicants no longer need to satisfy the eligibility test of not occupying another agricultural holding that is capable of producing a commercial return.

The Tenant Farmers’ Association (TFA) has welcomed the move, insisting that the previous rule penalised progressive farmers.

Chief executive George Dunn said the occupancy condition had been a “particularly onerous requirement” for an applicant who was occupying other agricultural land when applying for succession.

This was particularly so in situations following an unexpected death, where succession candidates had been unable to plan around not occupying another commercial unit at the point of application, he added.

“It also penalised those individuals who were most progressive in the industry by taking on additional opportunities while they waited for the opportunity to succeed to a family farm tenancy,” said Mr Dunn.

Suitability

But while this change paves the way for more tenants to apply for succession, another change raises the bar on the standards for suitability.

It means applicants must show that, had the tenanted holding been available on the open market, they would have been included on the shortlist by a “prudent and willing landlord” by demonstrating business skills and entrepreneurial acumen.

They don’t need to prove that they would have been the top candidate, only that they would be among the best.

“This change will mean that succession applicants will be better prepared for taking over the business of the holding, having thought through the business case as part of the process for succession,” said Mr Dunn.

It is 11 years since the recommendation for the changes were put forward in the Future of Farming Report in 2013, a document produced by a working group chaired by David Fursdon.

These have now been implemented as part of regulations introduced in England in 2021 following the Agriculture Act 2020, and in Wales earlier this year. 

CLA welcome

The Country Land and Business Association (CLA) has also welcomed the “modernisation” of the succession rules, particularly the need for applicants to reach a higher standard on suitability.

“We would advise landlords of Agricultural Holdings Act tenancies with remaining rights of succession to seek advice, and potential successors should plan in advance how best to prepare an application,’’ said CLA president Victoria Vyvyan.