Bps and Buying Property

[Ukjay]

Hello,

Some of the properties we are looking at currently quote something along the lines of "BPS payments by separate negotiation", so are payments likely to be held by the seller, even through they would no longer own the land /property indefinitely, unless we negotiate a deal - or am I reading that incorrectly?

Apologies if this seems a dumb question, but I have not come across this before.

 

[farmerm]

Seller can retain entitlements but can’t claim payment against them unless they have bare land to claim them against. You can’t claim payment without entitlements. Entitlements have a value, seller may find someone willing to pay more than you, you may find someone else selling entitlements cheaper.. but surely best for both parties to come to a deal that combines both the land sale and the transfer of entitlements in parallel.

 

[Ukjay]

Seller can retain entitlements but can’t claim payment against them unless they have bare land to claim them against. You can’t claim payment without entitlements. Entitlements have a value, seller may find someone willing to pay more than you, you may find someone else selling entitlements cheaper.. but surely best for both parties to come to a deal that combines both the land sale and the transfer of entitlements in parallel.

Thank you.

So if I understand correctly, if I buy the property, I then therefore own the land these entitlements are linked to but cannot claim BPS - so the person holding them are simply doing so to extort more money out of someone, as they can't claim any reward for them other than to trade with other people who want to hold the person with the land to some legal ransome?

 

[ISCO]

it's a way of agents screwing more out of buyer. Theory is you will still pay same per acre without entitlements as if included.
Entitlements then added on as extra. Most agents around here then insist buyer pay their fees to transfer entitlements.

 

[roscoe erf]

and with Brexit and the eu payments in Wales are reducing and coming to an end soon so id not be paying extra for entitlements

 

[chaffcutter]

The entitlements are not linked to the land. They can be traded in their own right, and can only be used by someone who has a hectare for each entitlement to claim bps.
We retained the entitlements when we gave up a tenancy as the landlord had no claim on them, they belonged to us.
We then sold them to an apparently trustworthy buyer but getting them to stand by the agreement we made for payment has resulted in two applications to the court .....
Might as well have let them go with the tenancy!

 

[Ukjay]

The entitlements are not linked to the land. They can be traded in their own right, and can only be used by someone who has a hectare for each entitlement to claim bps.
We retained the entitlements when we gave up a tenancy as the landlord had no claim on them, they belonged to us.
We then sold them to an apparently trustworthy buyer but getting them to stand by the agreement we made for payment has resulted in two applications to the court .....
Might as well have let them go with the tenancy!

Hang on, I'm confused even more now.

So, if they are not linked to for example land I would be buying with our property - why can't I simply re-apply for the entitlements for my actual fields again then, as they would be using them against land somewhere else if I understand your reply correctly (apologies if I have misunderstood)?

If I cannot claim as someone is trying to extort more out of a property, then they surely must be linked to my properties land if I can not reclaim them or claim BPS?

 

[Ukjay]

and with Brexit and the eu payments in Wales are reducing and coming to an end soon so id not be paying extra for entitlements

Hence why after reading the replies - said properties are now off the list.

I do not see the reason other than greed and legalised corruption for doing these kinds of things.
Even uplift clauses on properties pee me off hence I sold my last property with all rights and possibilities for the new owners to build their own dream without having to worry about giving revenue away to some lazy arsed twot capitalising on their hard earned.

I'm (we are), probably in the minority these days though for thinking the way we do...

 

[chaffcutter]

You can’t get entitlements to go with the land you buy without buying them, agents trading them for clients buying or selling. Plenty traded direct on here as well, transfer is dead easy on line with RPA.

 

[Steevo]

If you buy a car.....it doesn’t have to come with a full tank of petrol. Petrol and the car are two separate items.

Same goes for land and BPS entitlements. Each has an individual value separate and not directly linked to the other.

 

[farmerm]

Hang on, I'm confused even more now.

So, if they are not linked to for example land I would be buying with our property - why can't I simply re-apply for the entitlements for my actual fields again then, as they would be using them against land somewhere else if I understand your reply correctly (apologies if I have misunderstood)?

If I cannot claim as someone is trying to extort more out of a property, then they surely must be linked to my properties land if I can not reclaim them or claim BPS?

Some clever dick land agent figured out they could turn entitlements into a commodity that they can trade and take a cut from! Say you are looking to purchase 20Ac, the seller owns 20ac of land and they own 20ac of BPS entitlements which they have been activating against the 20acre. Nothing links 20ac of entitlements to a specific 20ac parcel of land.

Someone may know better than me but as a guide I think trading of 2019 entitlements for non SDA land was in the region of £125/ha +Vat It is pretty small beer compared to the land price, knock £130/ha off what you are willing to pay for the land and then offer £130/ha for the entitlements. Where the purchase is of significant size I wouldn't be surprised if there might be some tax effect to be had for one or both parties depending on the agreed entitlement value to land value ratio.

However... if you are a new entrant or between 18 and 40 I think you may be able to apply for new entitlements from the national reserve..

https://assets.publishing.service.g...ta/file/814208/BPS_2019_scheme_rules_v2.0.pdf see page87

 

[Ukjay]

You can’t get entitlements to go with the land you buy without buying them, agents trading them for clients buying or selling. Plenty traded direct on here as well, transfer is dead easy on line with RPA.

Yes, but my last property (and I'm not talking only land here in this thread, it includes the house hence I find it strange) - the whole property came with the entitlements and no additional requirements put on me to buy them (not that we claimed mind).
Hence why I asked what this was all about.

So my question I suppose, as I cannot get the real gist following one of the above posts, is: if the person cannot claim off my land (nor can I) - then why hold onto them, trade them if there is no financial benefit - or is it simply a numbers game that some land owners cave in and buy them?

 

[Steevo]

Yes, but my last property (and I'm not talking only land here in this thread, it includes the house hence I find it strange) - the whole property came with the entitlements and no additional requirements put on me to buy them (not that we claimed mind).
Hence why I asked what this was all about.

So my question I suppose, as I cannot get the real gist following one of the above posts, is: if the person cannot claim off my land (nor can I) - then why hold onto them, trade them if there is no financial benefit - or is it simply a numbers game that some land owners cave in and buy them?

They could trade them to others (as above approx £125/ha value).

They could also transfer them onto another parcel of land. Those entitlements are not permanently linked to those specific acres, but could be linked to other acres of land that don’t already have entitlements associated with them. Also known as naked acres.

 

[Ukjay]

If you buy a car.....it doesn’t have to come with a full tank of petrol. Petrol and the car are two separate items.

Same goes for land and BPS entitlements. Each has an individual value separate and not directly linked to the other.

I got fuel in my car when I bought it, so maybe try another garage. ?

For me, when buying another house with land, I do not anticipate being extorted further to be able to utilise it as I should
Seems the vultures are getting worse..

 

[Ukjay]

Some clever dick land agent figured out they could turn entitlements into a commodity that they can trade and take a cut from! Say you are looking to purchase 20Ac, the seller owns 20ac of land and they own 20ac of BPS entitlements which they have been activating against the 20acre. Nothing links 20ac of entitlements to a specific 20ac parcel of land.

Someone may know better than me but as a guide I think trading of 2019 entitlements for non SDA land was in the region of £125/ha +Vat It is pretty small beer compared to the land price, knock £130/ha off what you are willing to pay for the land and then offer £130/ha for the entitlements. Where the purchase is of significant size I wouldn't be surprised if there might be some tax effect to be had for one or both parties depending on the agreed entitlement value to land value ratio.

However... if you are a new entrant or between 18 and 40 I think you may be able to apply for new entitlements from the national reserve..

https://assets.publishing.service.g...ta/file/814208/BPS_2019_scheme_rules_v2.0.pdf see page87

Thank you, that helps some more. Oh, and I'm nearer 50 now so not young enough ?

 

[Ukjay]

They could trade them to others (as above approx £125/ha value).

They could also transfer them onto another parcel of land. Those entitlements are not permanently linked to those specific acres, but could be linked to other acres of land that don’t already have entitlements associated with them. Also known as naked acres.

OK, so if they get transferred to naked acres, what is it that prevents claiming through rpa again for the land I buy with property if nothing is linked to said land?

 

[farmerm]

OK, so if they get transferred to naked acres, what is it that prevents claiming through rpa again for the land I buy with property if nothing is linked to said land?

They would be making an invalid and fraudulent claim, the rules state the owner of the entitlement units being activated against a given area of land must also be "in control" of that parcel of land on a given day, 31st May comes to mind by don't quote me on that... If the land has been sold to you (and assuming they are not then renting it back off you) they would by definition not be in control and would not be permitted to claim their entitlements against it.

 

[Steevo]

OK, so if they get transferred to naked acres, what is it that prevents claiming through rpa again for the land I buy with property if nothing is linked to said land?

Nothing stops you claiming....but you can only claim if you have entitlements.

 

[Ukjay]

They would be making an invalid and fraudulent claim, the rules state the owner of the entitlement units being activated against a given area of land must also be "in control" of that parcel of land on a given day, 31st May comes to mind by don't quote me on that... If the land has been sold to you (and assuming they are not then renting it back off you) they would by definition not be in control and would not be permitted to claim their entitlements against it.

Thank you.

So why would anyone hold onto entitlements if they cannot be used, as I would not be renting the same land I purchase back out?

To me, and I'm obviously not following this all the way through correctly at the minute, makes said entitlements null and void to the holder surely, and it is more a case of I can't use them so neither can you unless you pay me more money, albeit a smaller amount as I do not get how they can transfer to another person who also does not own the land they originally came via?

Seems to be a loophole that people are cashing in on...

 

[Ukjay]

Nothing stops you claiming....but you can only claim if you have entitlements.

Exactly, but if someone holds the entitlements for my land, how can they make claim?
They can't as they do not own said land, vso what / where does the value come from to make it appealing to another person.
I'm stumped here to get my head around this shenanigans..

Also, how can they retain said entitlements for the following year as they are not legally an owner of said land, do they lie?