Is the sale of land and farms the secret to succession planning?
The market for land and farms remains fairly buoyant in the West Midlands with strong competition for any reasonably sized blocks of land, either with or without buildings or farmsteads. Traditionally we find that selling land, or any asset for that matter, goes against the grain for most farmers, particularly where farms have been in family ownership for generations and there is an imbedded desire to protect the land for future custodians. But is this the most effective course of action for an integrated and effective succession plan?
We recently agreed the sale of a 200 acre former dairy farm with a stunning range of red-brick traditional buildings, a three-storey period farmhouse all complemented by some modern farm buildings. The farm had been in the same family since 1900 and was only offered for sale due to the retirement of two brothers, both bachelors with no children. Whilst this might appear to be a sad situation with no succession planning, let’s consider the situation from a different point of view. The farm has been bought by a neighbouring, dynamic farmer with sons itching to enter and expand their farming enterprise. Aware that very little other land close to their current farmstead is likely to come onto the market in the near future, they were extremely keen to purchase not only land but also a second farmhouse which will undoubtedly be needed in the future for one of the farming partners. The sale of the farm, which in reality was a succession plan in itself, has facilitated the succession planning of a second farming family. In a similar situation we recently sold a block of land on behalf of a client whose family succession plan was for the daughter to receive capital whilst the son took over the farm. The desire to ‘give with a warm hand, rather than a cold one’ was enhanced by being able to facilitate the daughter and son-in-law setting up a small-holding sooner rather than later. Happy days.
However, selling land is not the only way to facilitate an effective succession plan. We have been able to help a number of long-standing farming partnerships involving multiple family members with succession plans that involve land transfer, rather than sale, to achieve a more even balance of ownership to create new businesses for the next generation.
Succession planning remains the elephant in the room for many farming families but there are so many ways that we can help – either with the initial ‘difficult’ conversation or with innovative plans which meet the personal and business objectives of the stakeholders. The worst thing we can do is nothing – the best thing we can do is something.
Louise Taylor MA, MSc, Dip HRD is Managing Director of Taylor Millbrook Ltd and Partner in Barbers Rural Consultancy LLP. She is an RICS Accredited Mediator and specialises in Succession Planning. Contact Louise on 01630 692500 or email@example.com