Farming Succession Planning for Family Farms in Scotland
Farming Succession Planning for Family Farms in Scotland
Farming families often have most of their wealth tied up in land, stock and machinery, so passing the farm on safely needs careful thought and clear legal advice.
To speak to one of our farming succession solicitors in Perth, please call us on 01738 310 047 or complete our online contact form today.
Farming Succession Planning Explained
Farming succession planning is the process of arranging who will own and run the farm in future, and how value will pass between generations. It covers ownership of land and buildings, farming partnerships or companies, stock, subsidies and any diversified businesses.
A good plan aims to:
- Keep the farm as a viable unit for the next generation.
- Provide fair outcomes for farming and non farming family members.
- Manage inheritance tax and reliefs such as Agricultural Property Relief and Business Property Relief.
- Reduce the risk of disputes within the family.
Why Farm Succession needs Special Care
Farms face pressures that many other family businesses do not, including fluctuating commodity prices, changing subsidies and new environmental rules. Land law, agricultural tenancies and crofting rules add extra legal complexity.
Common challenges for farming families include:
- Only some children work on the farm, but others still need to be treated fairly.
- Land and buildings may sit in a partnership, a company or in personal names, each with different tax and succession outcomes.
- Agricultural Property Relief and Business Property Relief rules can change (as they recently have, significantly), affecting how farms are taxed on death and on lifetime transfers.
- Secure agricultural tenancies and crofting interests can have significant value and strict rules about succession.
How Eden Legal Supports Farming Families
Eden Legal is a specialist law firm based in Perth with a strong focus on agriculture, rural property and business law, advising farming families across Scotland. The team combines private client expertise in wills and tax planning with practical knowledge of how farms operate day to day.
Our farming succession planning service typically includes:
- Reviewing how the farm is currently owned and run, including a review of the title deeds, leases, partnership or company documents and any existing wills.
- Supporting family meetings to discuss who will farm, who will own, and how non farming children will benefit.
- Working with your accountant on inheritance tax, Agricultural Property Relief and Business Property Relief advice.
- Assisting with any conveyancing required to change how the land is owned.
- Preparing and / or updating wills, powers of attorney, partnership agreements and shareholders’ agreements for farming families.
- Putting in place a clear review cycle so your plan keeps pace with changes to the farm, the family and the law.
The Farm Succession Planning Journey
Eden Legal’s solicitors guide farming families through a clear, structured process so everyone knows what to expect.
1. Understanding your farm and family
The team takes time to understand how the farm is owned, who works in the business and what each family member hopes for the future.
2. Clarifying goals for the farm
Together you will discuss priorities such as keeping the core holding intact, providing homes for family members and supporting those not involved in farming.
3. Designing the succession plan
Your solicitor sets out options for transfers of land, partnership interests, shares and other assets, including lifetime gifts and plans for succession on death.
4. Legal and tax implementation
Once decisions are made, Eden Legal prepares or updates wills, powers of attorney, partnership agreements, company documents, conveyancing documents and any trust arrangements.
5. Family communication and agreement
The firm can help you share the plan with family members and, where useful, chair family meetings to promote understanding and reduce friction.
6. Monitoring and review
Farm business structures, subsidies and tax rules change, so your plan is reviewed at agreed intervals or when major events occur.
Scottish Farming Law and Tax Considerations
Farm succession planning must reflect Scots law on succession, agricultural holdings, crofting and tax. Eden Legal keeps a close eye on developments affecting Agricultural Property Relief and Business Property Relief for farmers.
Key legal and tax points include:
- Legal rights mean certain family members can claim from an estate, which can impact how farm assets are passed on if not managed carefully.
- Changes to reliefs for agricultural and business property may limit the value that qualifies for full inheritance tax relief.
- Agricultural tenancies and secure 1991 Act tenancies involve strict rules on assignation and succession, with short timescales after a death that must be adhered to.
Wills, Partnerships, Companies and Trusts for Farms
The right legal structure can make the difference between a smooth handover and years of uncertainty. Eden Legal advises on the full suite of documents needed for a robust farming succession plan.
Typical tools include:
- Wills that deal clearly with farm assets, partnership interests, shares and non farming assets.
- Partnership agreements that set out ownership of land, stock, machinery and entitlements, and what happens when a partner dies or retires.
- Company structures for farms that trade through limited companies, including shareholders’ agreements and share classes.
- Trusts where appropriate, to hold land or other assets for future generations or to protect vulnerable beneficiaries.
- Powers of attorney so trusted people can manage business and personal decisions if you lose capacity.
Managing Disputes and Sensitive Family Issues
Strong feelings can surface when discussing who inherits the farm and who runs it. Long standing arrangements, on farm housing and financial commitments can add extra tension for farming families.
Eden Legal’s lawyers can:
- Act as an independent voice in family discussions, helping everyone feel heard.
- Highlight legal and tax realities so decisions are informed, not based on assumptions.
- Propose practical compromises, for example compensating non farming children with non farm assets or insurance.
When to Speak to a Farming Succession Solicitor
Many farming families delay succession conversations, which can create more risk over time. Early advice gives you more options and more time to build consensus.
You may benefit from legal advice if:
- You are thinking about retirement or reducing your involvement on the farm.
- Some children work on the farm and others do not, and you want an approach that feels fair.
- Your farm operates through a partnership or company and the paperwork is outdated or unclear.
- You are unsure how reliefs such as Agricultural Property Relief and Business Property Relief could affect the family (particularly in light of recent significant changes).
- There is a secure agricultural tenancy, croft or other rural property interest to pass on.
Frequently Asked Questions
1. What is farming succession planning?
Planning how ownership and control of your farm will pass to the next generation, covering land, business and tax.
2. When should a farmer start succession planning?
Many advisers suggest starting discussions at least ten years before planned retirement or major changes.
3. Can non farming children still be treated fairly?
Yes. Fairness can be achieved in so far as possible in your circumstances, for example by using non farm assets, insurance or staged payments alongside the farm.
4. Do I need a written partnership agreement for the farm?
If you farm in partnership with others, a full written partnership agreement is strongly recommended. It clarifies ownership, profit shares and what happens if a partner dies or retires.
5. What happens if there is no succession plan for the farm?
The estate follows default rules, which can trigger disputes, tax problems and threats to farm viability.
Contact our Farming Succession Lawyers in Perth
Eden Legal’s farming succession solicitors in Perth support farm owners, tenants and rural families across Scotland with clear, practical advice. To arrange a confidential discussion about your farm’s future, call us today on 01738 310 047 or fill in the firm’s online contact form and a member of the team will respond promptly.