To receive the lump sum under the Lump Sum Exit Scheme you must transfer out the agricultural land that was ‘at your disposal’ on 17 May 2021. The land will have been at your disposal if you were either: the owner-occupier, farming the land or employing a contractor; or a tenant with a Farm Business Tenancy under the Agricultural Tenancies Act 1995 or an Agricultural Holdings Act 1986 tenancy (or equivalent). You must provide evidence of the transfer by 31 May 2024.
Land You Don’t Need To Transfer Under The Scheme
You don’t need to transfer:
- Up to 5 hectares of the land
- Any land that you plant with trees under a woodland creation scheme
- Any land parcels, or parts of land parcels, that were non-agricultural on 17 May 2021 (such as woodland, even if this was eligible for Basic Payment Scheme)
- Any buildings, such as your farmhouse (if you are a tenant of your farmhouse and want to stay, this would need to be negotiated with your landlord)
If you retain land, you cannot claim future BPS or delinked payments on the land or claim under some other schemes.
How To Transfer Your Land
You don’t need to transfer out all of the land at the same time or to the same person.
If you own the land, you can transfer it by:
- Selling it;
- Gifting it; or
- Renting it out under a Farm Business Tenancy for a minimum term of 5 years
If you are a tenant of the land, you can transfer it by:
- Surrendering the tenancy to your landlord, or ending it having served a Notice to Quit on your landlord
- Assigning the tenancy
- Succession
Land also counts as transferred if a tenancy expires, or the landlord ends a tenancy.
Sole Traders
If you are a sole trader, you cannot transfer the land to:
- Your spouse or civil partner; or
- Someone you are cohabiting with as a couple
You can transfer the land to anyone else, such as your children.
Partnerships Or Limited Company
If you apply to the Lump Sum Exit Scheme as a partnership or limited company, you cannot transfer the land to a partner or shareholder in the business. However, if only some partners or shareholders leave the business, they can leave the land to the remaining partners or shareholders, provided that they meet certain conditions:
- A partner with 50% or more interest in the profits of the partnership, or more than one partner with a combined interest of 50% or more, leaves the partnership.
- A shareholder with 50% or more equity in the share capital in the company, or more than one shareholder with combined shares of 50% or more, sells or gifts their shares
- The partners or shareholders leaving the business transfer the agricultural land used by that business if it is held, or partly held, in their name.
Where only some partners or shareholders are leaving, the business must still give up their BPS entitlements before the lump sum is paid.
Seek Legal Advice
When transferring your land under the Lump Sum Exit Scheme, it is important to consider instructing a solicitor. A solicitor can advise you on the transaction, and help you retain as much land as the Scheme allows. They can also advise you on how to appropriately deal with the transfer if you are a partner or shareholder of a business.
Should you require any additional information in relation to this matter then please get in touch at [email protected] or call us on 0330 127 8888 and our team will be more than happy to help.
