Your succession plan is a survival plan

Succession planning is not just a strategic move; it’s a survival plan for your farm’s future, ensuring the survival of your business, your farm, and in many respects, your family. A well thought-out succession plan can offer financial stability and certainty for the future.

Plan for succession

A key aspect of succession planning is open communication within the family. Discussing the future of the farm, identifying potential successors and understanding each family member’s perspective helps to align expectations and prepare the next generation for their roles and responsibilities.

In the agricultural community, common issues often arise during succession planning. Many farmers struggle with having no clear successor. Family issues, such as divorce and relationship breakdowns, can also be extremely detrimental to a farming business. Additionally, farmers often face challenges in ensuring fairness and equality between multiple children, as well as considerations like retirement housing and income, which may impact their decisions.

Another critical element is the legal and financial framework. This includes updating wills, setting up trusts and understanding tax implications. Professional advice from accountants, lawyers and financial advisers can help navigate these complexities and ensure that the succession plan is robust and legally sound. Discussing wills and future plans is a good starting point for succession planning. Bespoke support, such as estate and tax advice, discussions around business structures, and crisis management, can be invaluable.

Moreover, succession planning should also consider the operational aspects of the farm. This involves training the successors, transferring knowledge about farm management practices and gradually involving them in decision-making processes.

Changes to APR and BPR

Starting from April 2025, significant changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) will come into effect. The government has announced that the scope of APR will be extended to include land managed under environmental agreements with public bodies or approved responsible bodies.

From April 2026, the full 100% relief from inheritance tax will be capped at £1 million per person for combined agricultural and business property. Above this threshold, the relief will be reduced to 50%. This means that while the majority of estates will remain unaffected, larger estates will see a reduction in the relief available. Which ever category you fall into, you will benefit strongly from reviewing your plan.

Top Tips for Succession Planning

Firstly, talk about it. Discuss your plans with professional advisers—your solicitor, accountant, and land agent— and also with your family. Next, identify the problem. Whether it’s having no clear successor, retirement housing, income, or relationship concerns, identifying the problem is crucial to finding a solution. Finally, don’t think of your will as the entire succession plan – also consider other crisis management measures and business arrangements.

In conclusion, through careful planning and addressing both the human and financial aspects of succession, you can ensure a smooth transition and secure your family’s farming legacy.

Need more guidance? Listen to Brachers’ podcast series dedicated to the upcoming changes to inheritance tax reliefs.

This article was first published in the March 2025 edition of South East Farmer.

This content is correct at time of publication