Accountancy | Tax Planning | Business Support

At Glents we know that our understanding of your tenancies is important.

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'Old Style Tenancy'

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This is how the tenancies in place before 1 September 1995 are described, and were governed by the Agricultural Holdings Act 1986.  Tenancies under this legislation carried with them the right to succession and also have Inheritance Tax impacts for landlords.

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Landlords will want to renegotiate this tenancy where possible to get out of the generational tie and to improve their IHT position which is significantly improved if they can manage to get out of this tenancy, however they will normally need to pay for the arrangement which a tenant is unlikely to agree to.

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We have expertise in succession and can advise any farmers or landowners dealing with a succession.  The livelihood condition whereby a tenant needs to have derived 50% or more of livelihood from the holding can be a complicated one, but there are steps that can and should be taken in the 7 years prior to succession that you need to be aware of.  A case can live or die on the arbitrary choices you don't know you are making, such as which bank card you use to buy your shopping!

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Tenancies after 1 September 1995

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These will wither be Farm Business Tenancies or they will be tenancies commencing on or after the date but that simply satisfy the commencement condition for Agricultural Property Relief.

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Farm Business Tenancies are by far the most common tenancy type for farmers as they offer the 'best of both worlds' for landlord and tenant.  There is course pros and cons for each and the obvious difference to the old style tenancy is that the period of tenancy is much smaller, typically renewed every 3 to 5 years.  This provides great freedom to the landlord and also to the tenant, however it does not offer anywhere near the sort of security of life that the old style tenancy did, and can often lead to a lack of investment on the farm.

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Please get in touch if you have a tenancy issue or would like to discuss anything related to this.

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