How Trusts Can Help You With Your Farming Estate Planning

• Published date: 13 November 2023
• Subject Matter: Real Estate and Construction, Tax, Family and Matrimonial, Land Law & Agriculture, Inheritance Tax, Wills/ Intestacy/ Estate Planning
• Law Firm: Myerson Solicitors LLP
• Author: Myerson Solicitors LLP

A trust can be a useful tool to protect your farming assets.

A trust can be set up during your lifetime or on death in your Will.

It is important to appoint trustees who understand how your farming business is run, ensure they are responsible and can act objectively.

The trust can provide an income for your beneficiaries.

It can also be flexible by allowing your Trustees to decide when and how to distribute assets between your potential beneficiaries depending on their circumstances.

What are the advantages of transferring my farming assets to a trust?

• Using a trust to manage farming land can be beneficial in allowing the land and any farming assets to remain together under the management of carefully appointed trustees.
• A trust also helps to protect the assets for your children and future generations Often, it is difficult to predict which family members will be able to continue working in the farming business and how your loved ones' circumstances may change in the future. The trustees can assess the situation as time passes and act flexibly according to the best interests of the beneficiaries. You can leave a letter of wishes as guidance to your Trustees.
• It may also help to reduce the likelihood of disputes within the family if the Trustees can take into account the beneficiaries' circumstances before making decisions, rather than an outright gift of the farming assets over which you will no longer retain control and may no longer be appropriate.
• It can be more tax efficient forinheritance tax purposes to leave your farming assets to a discretionary trust on death rather than outright to your spouse or another non-exempt beneficiary such as a charity. Information about the claim for relief from Inheritance Tax in relation to agricultural property is detailed below.

What farming assets do I own, and will they attract Agricultural Property Relief?

As part of your estate planning and an assessment of your Inheritance Tax position, it is important to be aware of the extent of the land owned in your name and whether it will attract Agricultural Property Relief ("APR").

Agricultural property relief ("APR") is a relief from the Inheritance Tax granted under the Inheritance Tax Act 1984. The relief is available on the agricultural value of an agricultural property, which is transferred either in lifetime (which would be a gift) or on death.

Often, farmland has been passed down from one generation to another, and it may not have been registered with the...