Farming News - English & Welsh Govts Open the Door to Farm Tenancy Changes

English & Welsh Govts Open the Door to Farm Tenancy Changes

09 Apr 2019
Frontdesk / Finance

The Tenant Farmers Association (TFA) has welcomed the launch of concurrent consultations on agricultural tenancies in England and Wales planned for tomorrow.

These consultations spring from a comprehensive report delivered to DEFRA and Welsh Government Ministers by the Tenancy Reform Industry Group (TRIG) in the autumn of 2017. However, it is understood that not all the recommendations made in that report will make it into the consultation.

TFA Chief Executive, George Dunn, said “It is great to see some of the ideas discussed by TRIG gaining wider exposure as it was disappointing the Agriculture Bill, published last year, failed to feature any reference to agricultural tenancies. Important changes do need to be made to the Bill to ensure that farm tenants are not left out of new policy initiatives. We hope that there will be time to feed in some of the ideas raised in these consultations in the debate on the amendments tabled, and as we head towards the latter stages of the Bill.”

The consultations will contain some radical proposals. These include allowing tenants to sell their interest through tenancy assignments to assist retirement and restructuring. Also, providing tenants greater leverage over restrictive user clauses preventing them from diversifying or entering public payments for public goods schemes. In addition, major changes to the rules surrounding tenancy succession which will massively simplify the process.

“Whilst we are really pleased to see these suggested changes to legislation, it continues to be a source of frustration that we are not able to look at possible changes to the taxation framework within which agricultural tenancies operate. The consultation will look at some of the legislative barriers to longer tenancies, but the biggest drivers are the way in which taxation operates. For example, the TFA has argued that landlords should only be able to obtain Agricultural Property Relief from inheritance tax if they are letting their land for 10 years or more rather than for tenancies of any length as is currently the case,” said Mr Dunn.

As Farm Business Tenancies now account for almost half of all tenancies, and with over 80% of all new tenancies being let for five years or less. We risk moving into a very short-term environment which is not good commercially or to produce public goods. We need the legislative and fiscal environments to work together to achieve longer lengths of term.”