‘Avoid making rash decisions amid Budget fallout’

Seek advice before taking action

Hasty decisions around succession planning and diversification should be avoided following last autumn’s budget, say legal experts.

Widely criticised for imposing inheritance tax on farming assets worth more than £1 million, the budget saw farm businesses hit by a raft of other measures too – including the faster phase-out of the basic payment scheme (BPS).

Denise Wilkinson, head of agriculture and partner at solicitors HCR Law, says the

changes understandably sent a wave of panic across the farming community – potentially forcing farmers into making rash decisions.

“As it stands, we still don’t have the guidance that we need to make all the decisions with regards to succession planning – and when it comes to succession and rethinking business structure, you shouldn’t make changes overnight.”

Ms Wilkinson advises farmers to sit down and discuss the situation with their solicitors and accountants. “There may be some things which can be done now and initiating these discussions is key,” she explains.

Families may already have a plan in place that could be revisited and potentially implemented. If not, they should assess which assets currently qualify for inheritance tax relief.

“It’s also worth considering discussions about involving younger family members in the business or addressing asset planning with older relatives. If health permits, exploring life assurance to offset tax liabilities could also be a valuable step.”

The BPS phase-out – and uncertainty around the Sustainable Farming Incentive – particularly regarding budgets, tax implications, required capital investment and infrastructure — has increased the financial pressure on farm businesses.

For farmers looking to diversify to generate additional income, the changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) could undermine the viability of such ventures.

Assets and funding

The suggestion that assets may be devalued due to reduced reliefs raises questions about funding, says Ms Wilkinson – and the banks’ stance on these changes remains unclear, she adds.

But farmers should refrain from assuming this means a one-size-fits-all approach. Instead, they seek legal advice to understand how the changes might affect their own individual business model.

“Every farm is different, whether that’s the size, the family dynamic or the structure, so what works for one farm might not work for another. Talking to your solicitor and professional team is essential for making informed decisions.”

Technical guidance is still awaited on the Budget changes. This will include how it will affect existing trusts and other structures already in place to protect farm assets. A review of stamp duty land tax could also be in the pipeline.

The coming year will undoubtedly bring challenges, says Ms Wilkinson. But she adds: “Hopefully, 2025 will provide greater clarity enabling farmers to plan effectively for their future, their family’s future, and the future of their farm.”

Footpath decision is ‘attack on countryside’

A government decision to scrap the 2031 cut-off date for registering unrecorded rights of way is an attack on the countryside, say farm leaders.

The last Conservative government agreed to the 2031 deadline for adding unrecorded rights of way to the Definitive Map in England in 2023. But the Labour government confirmed it was revoking the decision shortly after Christmas.

Country Land and Business Association deputy president Gavin Lane described the move as a blow to farmers and land managers. “This is a backward step and is the latest attack on the countryside and farmers.”

Public access

Mr Lane, who is also a Norfolk farmer, said the country already had an enormous amount of public access – with 140,000 miles of public rights of way and 1.4m hectares of public access land in England and Wales alone.

“The vast majority of landowners are keen to promote responsible access, and work in collaboration with Defra and campaigning groups to ensure people can continue to experience the benefits of the countryside in decades to come.

The Definitive Map is England’s legal record of public rights of way. It was established by the Atlee government when it passed the National Parks and Access to the Countryside Act 75 years ago.

Once a right of way has been established, the local authority and the landowner are then legally responsible for maintaining them.