Ahas

[Brisel]

"dropped the insults?" There is only one person doing the insulting here, and it's not me...

Agreed - ending an AHA tenancy is not easy - it's not meant to be. I didn't say it was. That was the idea of AHAs. Non payment of rent, change of use, no qualifying successors upon death of the tenant and a few others can end them.
Regrant tends to be for FBTs as the tax treatment is better for the landlord. No 10 year trust charges - the surrendering tenant will be aware of this during negotiations if they are half smart. My knowledge of Scottish L&T law is more limited. I vaguely remember our discussions a while ago, with you falling down the gap between 2 pieces of badly written law.

 

[7610 super q]

"dropped the insults?" There is only one person doing the insulting here, and it's not me...

Agreed - ending an AHA tenancy is not easy - it's not meant to be. I didn't say it was. That was the idea of AHAs. Non payment of rent, change of use, no qualifying successors upon death of the tenant and a few others can end them.
Regrant tends to be for FBTs as the tax treatment is better for the landlord. No 10 year trust charges - the surrendering tenant will be aware of this during negotiations if they are half smart. My knowledge of Scottish L&T law is more limited. I vaguely remember our discussions a while ago, with you falling down the gap between 2 pieces of badly written law.

But not according to that article. Existing tenant can assign the tenancy to a third party for another 25 years, if I'm reading it correctly. I wonder what the point of ownership is TBH. Hopefully the CLA will put a stop to it, but don't hold your breath.

 

[glasshouse]

"dropped the insults?" There is only one person doing the insulting here, and it's not me...

Agreed - ending an AHA tenancy is not easy - it's not meant to be. I didn't say it was. That was the idea of AHAs. Non payment of rent, change of use, no qualifying successors upon death of the tenant and a few others can end them.
Regrant tends to be for FBTs as the tax treatment is better for the landlord. No 10 year trust charges - the surrendering tenant will be aware of this during negotiations if they are half smart. My knowledge of Scottish L&T law is more limited. I vaguely remember our discussions a while ago, with you falling down the gap between 2 pieces of badly written law.

An AHA regrant also quslifies for 50% relief on iht
The law wasnt badly written, the truth will out in the coming years.

 

[glasshouse]

But not according to that article. Existing tenant can assign the tenancy to a third party for another 25 years, if I'm reading it correctly. I wonder what the point of ownership is TBH. Hopefully the CLA will put a stop to it, but don't hold your breath.

CLA will be overruled

 

[Brisel]

An AHA regrant also quslifies for 50% relief on iht
The law wasnt badly written, the truth will out in the coming years.

That depends;

https://thrings.com/changing-lanes/

Will the truth get you the farm back?

 

[glasshouse]

That depends;

View attachment 791096
https://thrings.com/changing-lanes/

Will the truth get you the farm back?

No, but i mght get my money back

 

[Brisel]

No, but i mght get my money back

Good luck

 

[NLF]

But not according to that article. Existing tenant can assign the tenancy to a third party for another 25 years, if I'm reading it correctly. I wonder what the point of ownership is TBH. Hopefully the CLA will put a stop to it, but don't hold your breath.

I read the consultation paper, all pretty sensible stuff with the exception of the 25 year extension which is very half baked.

The view is that there are elderly AHA tenants who are stuck farming because they cannot afford to retire. The proposal is that allowing the tenant to sell a 25 year lease extension to an unrelated third party would produce a lump sum to incentivise the elderly tenant to move on and allow an enterprising new entrant to take over the farm. However, the new 25 year lease will be at an open market rent rather than an AHA rent. Therefore the value of the tenancy is likely to be limited, thus failing to provide the incentive for the elderly tenant to quit! In addition the landlord will have first option to acquire the new lease so the reality is that the landlord will probably end up paying a very small sum to the outgoing tenant to avoid the risk of getting stuck with a 25 year lease extension.

 

[NLF]

First hand Knowledge
If you kept to polite conversation and dropped the insults, we could get on better

Your statement that landlords would stop using AHA tenancies if reform is brought in is nonsensical.
They stopped issueing them a long time ago, and cannot end them arbitrarily.
There are a few new ones issued now and then, but they will be a re grant for tax purposes.
You may recall a re grant was the method my landlord used to defraud me of my investments

I'm not familiar with your story. At the risk of reopening old wounds, how did a regrant lose you your tenancy?

 

[glasshouse]

I read the consultation paper, all pretty sensible stuff with the exception of the 25 year extension which is very half baked.

The view is that there are elderly AHA tenants who are stuck farming because they cannot afford to retire. The proposal is that allowing the tenant to sell a 25 year lease extension to an unrelated third party would produce a lump sum to incentivise the elderly tenant to move on and allow an enterprising new entrant to take over the farm. However, the new 25 year lease will be at an open market rent rather than an AHA rent. Therefore the value of the tenancy is likely to be limited, thus failing to provide the incentive for the elderly tenant to quit! In addition the landlord will have first option to acquire the new lease so the reality is that the landlord will probably end up paying a very small sum to the outgoing tenant to avoid the risk of getting stuck with a 25 year lease extension.

They tried that in scotland, but effective campaigning means we have the right to assign an aha for ever to anyone at the same rent
The 2003 act was nfu/cla inspired to do away with security and give us fbts
The scottish tenant farmers formed an action group and turned it round, getting right to buy and other benefits like right to assign

 

[glasshouse]

I'm not familiar with your story. At the risk of reopening old wounds, how did a regrant lose you your tenancy?

See pm

 

[Red Fred]

I (and the other graziers here) received notice to quit on my 100 acres of grazing land last year. It was on a 1 year fbt so the landlord was entitled to do so, leaving me with 200 acres on my aha. I did nothing and decided not to go begging to have it back, but planned a strategic withdrawal, as I'm getting older, cows are getting more dangerous and there is lots to do on our own little place, such as sorting mum's estate.
Just before the time was up, I was asked to the office to see if I would like the land back and the agent would play with the figures. The new proposal is a grazing license but I must be off by September and only one cut if mowing,10% rent hike to £55/acre, all the fences to be removed and the lot will be put in the landlord's enviro scheme, so I will be at the mercy of NE as well. The land is rough grazing meadow SSSI. The icing on the cake is that I have to surrender 22 acres of my aha land and convert it to grazing license as well as it makes for a shorter run of boundary between the two new areas.
I think I will keep reducing my cows and look elsewhere for some grazing.

 

[chipchap]

Not everybody appreciates that an AHA 1986 tenancy where there has been a succession post 1995 will get 100% relief for IHT, whereas the previous tenancy only got 50%. Landlords have good reason to allow a succession to occur.

 

[glasshouse]

I (and the other graziers here) received notice to quit on my 100 acres of grazing land last year. It was on a 1 year fbt so the landlord was entitled to do so, leaving me with 200 acres on my aha. I did nothing and decided not to go begging to have it back, but planned a strategic withdrawal, as I'm getting older, cows are getting more dangerous and there is lots to do on our own little place, such as sorting mum's estate.
Just before the time was up, I was asked to the office to see if I would like the land back and the agent would play with the figures. The new proposal is a grazing license but I must be off by September and only one cut if mowing,10% rent hike to £55/acre, all the fences to be removed and the lot will be put in the landlord's enviro scheme, so I will be at the mercy of NE as well. The land is rough grazing meadow SSSI. The icing on the cake is that I have to surrender 22 acres of my aha land and convert it to grazing license as well as it makes for a shorter run of boundary between the two new areas.
I think I will keep reducing my cows and look elsewhere for some grazing.

Sounds rather one sided
Surprise surprise
Are there others keen for it?
How much cash is landlord getting from scheme ?

 

[glasshouse]

Not everybody appreciates that an AHA 1986 tenancy where there has been a succession post 1995 will get 100% relief for IHT, whereas the previous tenancy only got 50%. Landlords have good reason to allow a succession to occur.

And even better reasons to not allow it

 

[Bramble]

Not everybody appreciates that an AHA 1986 tenancy where there has been a succession post 1995 will get 100% relief for IHT, whereas the previous tenancy only got 50%. Landlords have good reason to allow a succession to occur.

Not heard of this before, have you a link to anything to confirm. My landlord has asked twice for a surrender and regrant of our AHA

 

[glasshouse]

Not heard of this before, have you a link to anything to confirm. My landlord has asked twice for a surrender and regrant of our AHA

He needs to make it worth your while?

 

[chipchap]

From government IHT manual:

Land let on new tenancies
IHTA84/S116 (2)(c) (inserted by FA95/S155) states that 100% relief will apply if the interest of the transferor in the property does not carry either of the rights mentioned in paragraph (a) that is

the right to vacant possession, or
the right to obtain it within 12 months,
because the property is let on a tenancy beginning on or after 1 September 1995.

So, this section will apply for all new tenancies of agricultural land that began on or after 1 September 1995, not just farm business tenancies under the ATA 1995. Further guidance on this point, and an example, can be found at IHTM24241. A succession tenancy granted under the statutory succession scheme in the 1986 Act will be a ‘new’ tenancy for this purpose if it began on or after 1 September 1995. For the purposes of inheritance tax the beginning of the new tenancy is taken to be the date of death of the tenant who has been succeeded, IHTA84/S116 (5B).

 

[Brisel]

He needs to make it worth your while?

Definitely worth it for the landlord. It's a good bargaining chip for the tenant.

 

[chipchap]

Definitely worth it for the landlord. It's a good bargaining chip for the tenant.

But of course few land agents advertise the fact, instead they try and get tenants onto FBT so they can crank up the rent. Only doing their job of course.