Agricultural land is one of the few asset classes to have increased in value during the economic turmoil of the last few years. It is still regarded by many as a safe investment and, with careful planning, can often be passed onto the next generation in a tax efficient way.
We have particular expertise in agricultural property here at Cozens-Hardy LLP.
Whilst the sale and purchase of agricultural land is, to some extent, no different to any other land transaction, special considerations apply. The supply of water, particularly for irrigation, is often an important consideration as is the requirement for (and terms of) any water abstraction licence. Title matters, boundary ownership and rights of way all need to be checked, as does any liability for chancel repairs, together with the existence of any registered commons or village greens.
Farm subsidies have been an important factor for some time but the rules governing them have become increasingly more complex. The transfer of Entitlements needs to be handled carefully in any transaction to ensure that the purchaser obtains the benefit of these. Farmers are likely to need advice on both residential and agricultural tenancies. Again, legislation relating to ‘tied cottages' is complicated, as it is for ‘old style' agricultural holdings and new farm business tenancies. Sometimes planning permission for a farm cottage will only have been given subject to an agricultural occupancy condition and the terms of this need to be checked.
On a final note, 'clawback' - or the reservation of development value - has become more common when selling agricultural land in respect of which planning permission might be granted at some time in the future. Clawback agreements are complicated documents and both vendor and purchaser need careful advice on the wording. Such an agreement will often run for upwards of 25 years and so has long-term implications for both parties.