AHA Succession

[Gormers]

Have just joined TFA and have someone calling me Monday for some initial advice and some recommended professionals which is a start. Definitely want to avoid FBT and keep AHA tenancy.

Wishing you the best of luck, really good advice given on here.
Just to cheer you up, i am on smaller acreage, year on year FBT with county council and rent review due in spring.

 

[EJS]

Wishing you the best of luck, really good advice given on here.
Just to cheer you up, i am on smaller acreage, year on year FBT with county council and rent review due in spring.

You would hope a rent decrease would be in order with decreasing SFP, higher inputs and lower returns on cereals, particularly on smaller acreages as you cannot spread costs - am sure they will have an argument for an increase - Good luck with that anyway

 

[veghead]

Hell. Hadn't even considered this - thanks for bringing it up. My old man keeps avoiding the subject of succession - I don't really even know the terms of our two tenancies. On top of that, I get paid a salary and my OH is a GP (so earning slightly more than a tenant farmer). Going to look into the TFA now.

 

[YorkshireAndrew]

We joined TFA recently , when we needed legal advice they were very helpful .

 

[EJS]

The TFA were very helpful, I also have a meeting next week with a recommended agent so hope things are becoming clearer.
Very useful advice given on this thread - thanks to all.

 

[AgriNick]

just gone through this myself, my own tenancy comes into effect from the 1st of Jan next year...There isn't much i can say that hasn't already been said...I used 1 of the TFAs recommended professionals, who I cannot recommend enough.
What I would say is...Don't rush it! once you have had your meeting with your advisor things will become clearer, but basically there are certain 'hoops' you are required to be able to jump through so to speak...the 'livelihood test' is just 1 of these hoops. don't get too hungup on 'wage' anything you take from the farm can be taken into consideration. mobile phone contracts, washing, meals, ANYTHING of this sort classifys.
good luck!

 

[DrivingDig]

I discovered the other day you can have a FBT with AHA rent characteristics (ie rent determined by income potential of the holding and NOT what some twit neighbour has paid for their FBT. If you are forced into an FBT corner then at least try to go for AHA rent clauses!

 

[blondeagadvisor]

This blog tells you about gearing up for succession: https://blondeagadvisor.wordpress.c...n-details-of-the-eligible-and-suitable-tests/

The income from the farm has to be spent on your livelihood- it is the 'principle source of livelihood' they are looking at, so income from the farm should be spent on your living costs, e.g. mortgage, groceries etc...

 

[billboy 1]

if you've got a farm that's only capable of providing 1 sensible income on a aha tenancy and you want somebody to succeed you how do you get round the livelihood test for potential successor who could also carry on their off farm business along side farm at some point in the future

 

[blondeagadvisor]

if you've got a farm that's only capable of providing 1 sensible income on a aha tenancy and you want somebody to succeed you how do you get round the livelihood test for potential successor who could also carry on their off farm business along side farm at some point in the future

That's a very interesting question- there isn't really an answer except to ensure that what is received from the farm is documented in such a way that the potential successor is living off the farm, if someone is in this situation, it is a good idea to have a sit down with the accountant and an advisor that is specialist in this area. remember that benefits count, so if you live at home, have your phone bill paid, car insurance etc... through the farm, that all counts as the farm being your source of livelihood.

 

[billboy 1]

to me this is where the legislation falls down . I suppose I'm talking about automatic right to succeed as long as your computant . In our case our son has been encouraged to do something else and is running his own non farming business but would like to come and live/ work on the farm eventually so we can move on I'm told if push comes to shove they would examine his non farming income and use this to prove his livelihood hasn't come from the holding

 

[Surgery]

Hell. Hadn't even considered this - thanks for bringing it up. My old man keeps avoiding the subject of succession - I don't really even know the terms of our two tenancies. On top of that, I get paid a salary and my OH is a GP (so earning slightly more than a tenant farmer). Going to look into the TFA now.

If you are a member of the nfu they will out you onto a person to talk about tenancies , the tfa will only do the same but you have to pay to join.

 

[carbonfibre farmer]

The TFA were very helpful, I also have a meeting next week with a recommended agent so hope things are becoming clearer.
Very useful advice given on this thread - thanks to all.

@EJS, have things progressed/moved on any more? In your favour I hope!

 

[EJS]

They are moving slowly, but my livelihood is indeed an issue as I take too little from the farm for the family to depend on it. I have had a meeting with agent and they are helping me try to ring fence my finances a bit and have suggested approaching landlord with some flexibility regarding tenancy - ie possibly agreeing to retire early (65/70) rather than keep until death and also amend to allow improved APR for landlord, am looking into this but far from ideal, so am not keen to move forward until I am sure that is the only way.

 

[Will Blackburn]

They are moving slowly, but my livelihood is indeed an issue as I take too little from the farm for the family to depend on it. I have had a meeting with agent and they are helping me try to ring fence my finances a bit and have suggested approaching landlord with some flexibility regarding tenancy - ie possibly agreeing to retire early (65/70) rather than keep until death and also amend to allow improved APR for landlord, am looking into this but far from ideal, so am not keen to move forward until I am sure that is the only way.

They are very big concessions, possibly halving the term, and converting to an FBT to gain APR. You need to become a partner then you can earn (equity in the business) without sucking cash out of the business. Another way would be to live in one of the dwellings so benefitting financially and increasing your dependance on the farm business. I assume that as tenant you would be expected to live in the primary residence?

Technically there is no right to 3rd succession, but I would assume you mean 3rd generation, 2nd succession, might be worth checking for sure how many there have been?

 

[EJS]

They are very big concessions, possibly halving the term, and converting to an FBT to gain APR. You need to become a partner then you can earn (equity in the business) without sucking cash out of the business. Another way would be to live in one of the dwellings so benefitting financially and increasing your dependance on the farm business. I assume that as tenant you would be expected to live in the primary residence?

Technically there is no right to 3rd succession, but I would assume you mean 3rd generation, 2nd succession, might be worth checking for sure how many there have been?

Sorry - I meant 2nd succession 3rd generation - the primary farmhouse was given up when my grandfather died as dad and uncle had small tied cottage each - when uncle died the landlord said my aunt could stay in their cottage and am sure dad will stay in his so that wont be an option- I am hoping to move to a partnership for several reasons, including increasing financial 'dependence' on the farm. I really dont want to make all those concessions - just looking at scenarios and ways around them.