HHLE Property Matters Autumn Winter 21 - Flipbook - Page 5
Changes to the
Act 1986 Succession
Rules in England
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Securing the farming business for
the next generation has always
been a strong desire within the
In the last 10 to 15 years,
there has been a much greater
acknowledgement of the issue of
succession within agriculture, yet
there is still a very distinct need to
move beyond the awareness stage to
encourage succession planning.
Succession does not mean that
both the decision-making process
and financial decisions of the
business need to be passed down
on the day of the initial discussion,
only that a plan is initiated to allow a
smooth transition in the future from
one generation to the next.
Succession is an important topic
of discussion within all agricultural
businesses but especially for tenants
operating under the Agricultural
Holdings Act 1986.
It remains that under an
application for succession, the
applicant must satisfy both the
eligibility test and the suitability test.
However, following the Agricultural
Act 2020 there has been several
significant changes to the tests for
the succession process in England.
From 1st September 2024, the
commercial unit test will no longer
form part of the eligibility test.
Under the eligibility test, succession
applicants upon the date of death or
the date of retirement of the previous
tenant, will only have to satisfy
the close relationship test and the
principal source of livelihood test.
The suitability test has also been
revised and for the first time, now
includes the requirement for an
applicant’s ability to manage a
holding in a manner which cares for
the environment, to be considered.
Alongside this, the characteristics
of the tenant’s agricultural holding,
their training and skill in agriculture
and business management, financial
standing and the terms of the
existing tenancy are also considered.
More notably, the changes have led
to an applicant’s age and health to
It is important to be aware that any
current applications for succession
will not be impacted before the new
rules come into effect in 2024.
The complexities of succession
planning means that discussions
should be held at a much earlier
stage than envisaged. Seek the
help of assistance of professional
advisors, to provide guidance
throughout an ongoing process in
order to future proof the farming
business to ensure the best possible
outcome for all involved.