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Longer tenancies required to help develop businesses
3:30pm Friday 14th March 2014 in Farming
THE Tenant Farmers Association (TFA) will continue to press for longer tenancies.
Since the introduction of farm business tenancies in 1995, their average length has barely been more than four years, no good for anyone establishing or developing a livestock enterprise.
Since then landlords with land in their possession for at least seven years, have received 100pc relief from inheritance tax on the agricultural value of the land, regardless of the nature of the tenancy agreement offered.
Stephen Wyrill, new TFA chairman, said: “The TFA has long questioned the extent to which the nation receives value for money for this subsidy in light of the apparent unwillingness of landlords to let for sustainable lengths of time.
“As a result, the TFA argues that this tax benefit should only apply where landlords are prepared to let on at least a ten year basis.”
Mr Wyrill also spoke of cases where tenants had been forced to surrender SPS entitlements to landlords following the expiry of their farm business tenancies for little, or no consideration, in comparison to their value.
He said tenants should ensure their tenancy agreements are properly checked to ascertain exactly what they are required to do.
Mr Wyrill said: “Often, due to careless drafting, pre-existing tenancy agreements do not produce the results which landlords believe they intended.
The TFA is on hand to check any expiring agreements on behalf of members.”
The Association was pleased that the Environment Food and Rural Affairs select committee had recommended DEFRA should adopt the TFA’s definition of active farmers as those who are in occupation of the land being used to make a claim, taking the entrepreneurial risk and in day-to-day management control.
The TFA had also made a strong case for an agri-environment scheme for moorland areas focused on grazing livestock in recognition of the significant benefits they provide. It has urged the Welsh Government and DEFRA to reconsider their positions.
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