Jeremy's Blog 21st May 2021: Lump Sum and Advice
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 20th May 2021.
Past the mourning for the Duke of Edinburgh, the purdah for devolved and local elections and Queen’s Speech, DEFRA policy statements are now coming thick and fast. The policies proposed in the 25 Year Environment Plan and the 2018 Health and Harmony paper are now becoming real, demonstrating the importance of advice to clients navigating the new world.
- the Tree Action Plan with plans for tree planting, though more will happen in Scotland and Wales
- the Peat Action Plan, bearing on lowland and well as upland peatland with restoration of 35,000 hectares, much of that in the “Great North Bog” (Scotland is aiming for 250,000 ha)
- further commitments on biodiversity and work on the re-introduction of species.
The long-delayed consultation on the Lump Sum Exit Scheme in 2022 and De-linking for 2024 for Basic Payment in England came yesterday with the outcome expected in October. Its notice that entitlements will have no function after 2023 is one more sign of the sea change in policy. We should shortly have details for:
- the SFI Pilot – the CAAV Briefing with DEFRA for members is on 26th May
- the remaining tenancy regulations
- the outline of SFI 2022.
Those interested in the Lump Sum will need good advice for this personal and practical decision. Beyond the issue of whether the post-tax payment is attractive, advice can:
- check eligibility and timetables
- review the issues where the claimant is a partnership or a company with the consequences for partners and directors and so whether any changes are possible
- set out what land is to be sold, given, leased or surrendered and what could be kept (with what that might offer for income or development)
- check the position of any entitlements leased in or held on trust
- consider the client’s agri-environment agreements
- brief on any commons issues
- cover any intended family succession
- consider how all is to be done within the timetables required and whether that can be managed to qualify for Business Asset Disposal Relief (Entrepreneurs’ Relief)
- see whether this payment might unlock other negotiations or opportunities
- ask if anyone might see the lump sum as a chance to press a claim.
That is just a first taste of how the Agricultural Transition will call on the agricultural valuer’s ability to give advice in the round for many clients to make the best decisions.