Two meanings, one expensive confusion

How we work

Why the statute comes before the valuation

This company is an agricultural holding company, meaning a holding company whose interests are agricultural. Separately, and confusingly, an agricultural holding is a defined thing in English law: land let under the Agricultural Holdings Act 1986. The two phrases sit a word apart and describe completely different things, and the second is the one that moves money. Which statute governs a given tenancy is the first fact to establish about any let land, and it is established from the documents rather than from what everyone has always understood to be the case.

The split runs roughly along September 1995. A tenancy under the 1986 Act generally carries security of tenure for the tenant's lifetime, together with statutory rights of succession on death or retirement for up to two successions, which have to be established before a tribunal on tests of eligibility and suitability rather than granted as a formality. A farm business tenancy under the Agricultural Tenancies Act 1995 carries no security beyond its contractual term and no succession at all, ending on notice of between twelve and twenty-four months where the term runs over two years. Identical land, identical yield, and a materially different capital value depending on which of those applies, because what a buyer acquires in the first case is an income with a tenant who may have decades behind them.

That is also where families come unstuck. A great deal of farm succession planning is built on a right that is assumed rather than checked, and the assumption tends to be tested at a funeral. So the order of work here is to read the papers, establish the regime, set out honestly what the documents support including where they are ambiguous, and then put every legal, tax and valuation question to the professional qualified to answer it. We do not give legal advice, tax advice or valuations. We hold and oversee; the farming belongs to the operating businesses, along with the contracts, the staff, the entitlements and the liability. And on the tax side there is one structural point always worth raising with an adviser, which is that reliefs of the business property kind turn on a business not consisting wholly or mainly of holding investments, while letting land is ordinarily an investment activity and farming in hand ordinarily a trading one.