One of agriculture’s most sensitive and pressing issues, inheritance and succession, is being tackled directly by farmers in mid Wales.
When the UK government’s inheritance tax (IHT) reforms thrust farm succession planning into the headlines in 2024, Agrisgôp Leader Elaine Rees Jones took on the challenge to compile a package of meetings to support the industry, recruiting two groups in the Welshpool area.
Agrisgôp, a fully funded management development programme, encourages farmers eligible for that support to get together to gain confidence and skills through action learning.
Elaine brought together farming families for a structured programme consisting of discussion with professionals and alongside fellow business owners.
Two groups emerged from that initial process – parents seeking to research and establish forward plans for succession, and the next generation exploring options for taking over and transferring knowledge from parents.
Communication across those generations was identified as key to a successful succession.
The groups were designed to offer an alternative option to the process of succession planning, which Elaine says is often a very personal and private journey.
“The meetings have offered the opportunity to gain professional and peer advice, time away from the farm to assess situations, and a safe, confidential space for discussion,’’ she says.
“The group members have shared any concerns and apprehension whilst getting to grips with understanding the subject and the enormity of it, and hopefully devising an action plan.
“Personally, I have found the honesty and openness of the group members in sharing their individual experiences, situations and emotions very humbling, it has been a pleasure to have been involved.’’
This has enabled the farmers involved to begin the necessary formal and business-led discussions as early as possible.
For one farming couple who have been working through the process of passing on assets to their two sons, being members of the Agrisgôp group has been pivotal.
“It has made us tackle things; we were already looking at succession before the Rachel Reeves budget last year so for us it hasn’t been a knee-jerk reaction.
“It is a very complicated process, there is often no easy answers, and it will be different for every business, but the support of Agrisgôp has been incredibly helpful. It has meant that when we have gone into meetings with our solicitors and accountants, we haven’t done so uninformed, just blindly accepting what they are telling us.’’
Another group member admits that, until she joined the group, she found the whole process of succession and tax planning “mind-blowing’’.
“Hearing from experts really has helped to better inform me, it has emphasised just how important it is to be prepared. Being part of the group has really helped with that.’’
The programme included a recent “ask the panel session” at Welshpool when speakers from earlier group meetings returned for a two-hour session to answer questions from group members.
There were also one-to-one sessions to clarify members’ understanding and to develop further their succession planning journey.
These speakers were professionals experienced at supporting farmers with tax, financial, legal and land valuation advice
Emma Hall, a chartered financial planner at 75point3, accountant Sion Roberts, of Dunn & Ellis, land agent Richard Corbett, of Roger Parry & Partners, and Angharad Hird, of Lanyon Bowdler Solicitors, provided guidance on specific questions raised by group members.
A clear message that emerged was just how vital it is to have a will in place, whatever a farmer’s age.
This was highlighted in an example given of a young farming family where the husband died suddenly. With no will in place the rules of intestacy applied which meant his wife inherited the first £325,000 of the estate and half of the remaining estate with the other half of that estate divided equally among the couple’s children.
“We see more of the younger generation now coming to us to make wills,’’ said Angharad.
From April 2027, pensions will be swept up into IHT, with pension savings that haven't been used before someone dies taxed as part of their estate.
“This could result in an IHT charge of up to 40% on the value of pension death benefits,” said Emma.
“A lot of our clients are now taking money out of pensions and putting it into trusts and, if they survive seven years, this money won’t be liable to IHT,’’ she advised.
Others are transferring all or some of that pension cash into annuities to generate an income, to reduce the IHT liability upon death.
The financial aspect of succession is just one part of a broad and complex transition process that must be addressed by family farms.
Farm and land valuations will guide HMRC on the amount of IHT due – these must be based on values on the day the tax will be charged, not historic figures. IHT is the only time when a Red book value is needed for property, Richard pointed out.
He said values can be mitigated by some features such as rights of way over land or property that is in multiple ownership therefore these need to be factored in.
Establishing who owns what is important.
“A search of the information held by the Land Registry doesn’t always show the property farmers believe they own,’’ Richard warned.
When succession planning, it can be tricky to put emotion to one side but Sion stressed the importance of doing so and getting good tax-based advice.
“Consider what your priorities are, the pros and cons of different approaches,’’ he said. “There is no one size fits all magic answer, all farms are different.’’
The rules around gifting and care fees were also raised.
If someone intentionally reduces their assets so that these are not included in a local authority’s financial assessment on care fees payable this is known as a deliberate ‘deprivation of assets.
Sion said that if the local authority decides that someone has deliberately reduced their assets to avoid paying care home fees, they may still calculate the fees as if the assets given away are still owned by the person needing care.
“The timing of gifting is important – if a person is fit and healthy when they gave away their assets or money away, and they could not have reasonably expected that they would need imminent care, then their actions may not count as deprivation of assets.” Sion added.
Support Through the Farming Connect Succession Pathway
Farming Connect’s Succession Pathway, provides a structured and supportive route to help farming families plan effectively for the future. The offering has been designed to navigate farm businesses through every stage of their succession journey and provides funding to facilitate important conversations and ensure plans are implemented.
The Succession Pathway includes:
Succession Reviews
A detailed business diagnostic that helps families:
- Review assets
- Understand their current tax position and risks
- Establish a clear to-do-list for succession planning
Facilitated Family Meetings
An independent professional facilitates sensitive discussions, helping families to:
- Address difficult topics in a safe, guided environment
- Improve communication
- Reduce conflict
Increase awareness of family and team dynamics and their impact on business efficiency
Bespoke Succession Plan
A tailored succession plan mapping out scenarios and recommendations, developed by a specialist advisor to reflect the family’s goals, business needs, and longterm direction.
Specialist Legal Services
Support from legal professionals to help implement the agreed succession plan. This final step includes wills, LPAs, partnership agreements or transfers and is essential to ensure the plan is carried forward and does not stall.
Alongside this, you may be interested in joining an Agrisgôp group with other businesses who are navigating similar challenges.
If you would like guidance on how these changes may affect your business, or if you are ready to begin your succession planning journey, Farming Connect is here to help.
Contact Farming Connect today on 03456 000 813 to access support through the Succession Pathway.
Alternatively, you can visit the Farming Connect website for further details and to submit an enquiry form online.
Planning now helps secure the future of your family and your farm.
