The highest volume of calls to the helpline run by local charity, Rural Support, continue to be issues around farm finances, but the next most topical problem tends to be issues related to farm succession.

“It is the elephant in the room. It leads to breakdown in relationships. Estimates suggest that one quarter of family members aren’t talking to others in the family due to issues over succession,” claimed Siân Bushell, the keynote speaker at a farm succession event organised by Rural Support earlier this week.

From a dairy farming background in Wales, Bushell offers advice on succession planning to farming families. Her message is very clear – don’t let the issue drift; start talking about it immediately. She also points out that times have changed, and it is no longer acceptable that one son gets everything, and other siblings get nothing.

“You need to grow your business to the size of your family. You may give the farm to one, but give something to others as well. But you don’t have to be equitable to be fair.

‘‘The earlier you start, the more options you have,” she said.

Where a son or daughter comes home to farm, she set out a number of issues that should be identified and followed:

  • Time: set out what is expected in terms of a working day, how much time off will be given, and when.
  • Money: how much will they be paid? This might be less than the average working wage, but add in the value of perks (such as the use of a farm vehicle). Keep good records, including an account of money owed by the business to the son or daughter.
  • Housing: she suggests that it is best not to live too close to parents, particularly if the successor marries someone from outside of farming. “It is much cheaper to buy a house in the town than pay for a divorce,” said Bushell.
  • Communicate: she maintained that this is the biggest issue that she comes across on farms. Her advice is to set aside an hour every week or twice a month for a proper business meeting so that everyone knows exactly what they are doing.
  • Responsibility: when a son or daughter comes home, make them responsible for a part of the business.

    • Taking everything together, Bushell emphasised the importance of having a clear plan at the start, with a timeframe identified when the business passes from one generation to the next.

    In many cases, the older generation will still want to be involved after handing over, so it is important to discuss what their future role might be, said Bushell.

    Will

    On wills, she maintained that it was vital to have this in place. “Do a will on how things are today, and then change it if necessary. Also, discuss with beneficiaries what is in the will. It is very important to explain why things have been done the way they are,” she said.

    In conclusion, she also highlighted the importance of taking good legal advice. While there should be no issue with exemption from inheritance tax on land that is actively farmed, the same might not apply to the farmhouse. It should be core to the farm business, and if it is inhabited by someone not actively farming, then HMRC could challenge the claim for agricultural property relief.

    There is also the issue that people are living longer, with higher rates of dementia often leading to people requiring specialist care. “Assets could be taken to pay for nursing care. Take advice. Be very careful as nursing care is hugely expensive,” she said.

    What Siân Bushell said:

  • “A young person who intends coming back to the family farm, should go and work for someone else first. It means that they will have made a proper choice to come home. They will be more valued. Where the farm employs people, they will be better employers.”
  • “For a son or daughter coming home to farm – it is a good idea to get rid [not literally] of brothers or sisters. Sort out who is getting what as soon as you can.”
  • “A farm might be worth £2m, but others need to understand that money is only realised if you sell it. Farms are not that profitable.”
  • “Be very careful putting siblings together in a farm business. Relationships can go wrong. Think of the format of the business and sort out how it could be split long term.”
  • “At some stage, you have to draw a line and say that any growth in the business shouldn’t be shared with brothers or sisters. With my husband, it sometimes felt we were building a business to give the sister-in-law a share of it.”
  • “I have heard every excuse why there isn’t a will. None of them are valid.”