Does the new cap fit birketts format - v3 with pictures - 25 03 2014 (5743425 1)
DOES THE NEW CAP FIT?
A CASE STUDY
James Dinwiddy, Birketts LLP
25 March 2014
• Joe and Ben Farmer are co-owners of 800 hectares. They farm 700 hectares
in hand and let 97 hectares to a neighbour called Mrs Sprout (due for
renewal). The remaining 3 hectares are let to Ms Toggi.
• Joe and Ben are also buying another 300 hectares from a neighbour.
• Joe and Ben grow spring and winter wheat, barley, rape and beans.
• Joe and Ben have an old written partnership agreement but Ben is thinking of
retiring and Joe’s son Harry (also a farmer) may join the business.
• Harry has a small holding of 20 hectares but is keen to do more. He turned
33 on 11 February 2014 and may want to join his father in the partnership.
• Angular Water own 70 hectares of grassland surrounding a nearby reservoir
– currently grazed under a grazing licence.
Transfer of entitlements when Joe and Ben are buying the additional land.
• As you were! – sale and purchase agreement should:
• allow for the transfer of the specified amount of entitlements;
• ensure cross compliance;
• cover submission of the RLE1 form;
• contain indemnities for any loss or reduction in the amount of entitlements
• Degressivity – reduction in basic payment
Mrs Sprout’s FBT
• include clause in renewal FBT allowing tenant to use the entitlements
whilst in occupation and to transfer them back to the landlord at the
end of the term.
Ms Toggi’s FBT
• Ms Toggi only rents 3 ha which is below the minimum eligible area
threshold of 5 ha.
• will therefore no longer be able to claim.
• sell entitlement before end 19 October 2014
• Joe and Ben’s in hand land – must grow three different crops.
This could be the wheat, rape and beans.
• They will need to have 5% of their land under EFA.
• Cropping licence v FBT
• Harry’s Land – only needs to grow 2 crops because within the 10-30
Young Farmers Scheme and business restructuring
• Harry could qualify as a young farmer and obtain the top-up payment on
the land he owns.
• What if he became a partner in his father and uncle’s business? –
probably not qualify as not head of holding;
• any split of the business would be heavily scrutinised by the RPA.
Angular Water – water works on negative list
• Sell / let