Less than a month left in consultation to ‘shake-up’ tenancy legislation

There is less than one month remaining for submissions to be made for a consultation on a “radical shake-up” of agricultural tenancy legislation for England and Wales.

According to leading accountancy firm Saffery Champness, the outcome of the consultation “may make it easier for people to leave the farming sector and also create opportunities for new tenant farmers with new ideas, and encourage them to enter the sector”.

The Department for Environment, Food and Rural Affairs (Defra) opened the consultation in April. The closing date is July 2.

Defra is looking for responses to a set of proposals it has outlined on this issue. Among these is a rule change that would allow tenants with agreements under the Agricultural Holdings Act (AHA), and who have no natural successor, to assign their tenancy to a new, unrelated tenant farmer.

According to Saffery Champness, this would allow an ‘exit route’ for older tenants seeking to retire, as well as providing a route into the sector for new tenants. The rule would also prevent a landlord from stopping the reassignment of a tenancy.

The Defra proposals would also: remove the minimum retirement age of 65; widen the pool of relatives that could succeed on the tenancy; and provide incentives to encourage landlords to grant longer term Farm Business Tenancies (FBT) of 10 years or more.

“We welcome proposals and fresh ideas that would allow our tenanted farming sector the greater flexibility which it needs if it is to remain vibrant. Ways must be found to encourage new entrants – the next generation – into farming,” said Martyn Dobinson, a member of Saffery Champness’ Landed Estates and Rural Business Group.

However, with such initiatives, we should not lose sight of the needs and rights of our agricultural landowners or the impact on reliefs such as Agricultural Property Relief [APR].

Dobinson warned that an excessively tough APR regime could result in a reduced stock of land available in the tenanted sector, with landlords potentially using the land for other purposes.

In order to learn more about the consultation, including information on how to make a submission, click here.