Leanne Gordon, Partner in our Rural – Land & Business team featured in today’s Scotsman (Monday 14 July 2025), in the article she discusses farming succession which remains one of the most sensitive and complex issues facing Scottish agriculture. While recent changes to inheritance tax have brought the topic back into focus, effective succession planning goes far beyond tax concerns.
Succession is one of the perennial challenges facing Scottish agriculture. It’s a conversation that everyone knows needs to be had. Yet it is one - for a myriad of reasons - which is often easier to put off until another day.
The furore which has followed the UK Government’s controversial changes to inheritance tax and its impact on farms, land-based enterprises and family businesses more widely has, however, thrown the issue into the spotlight.
With the average age of a farmer in Scotland over 60 years old this is not a topic which farming families can afford to avoid, in practical or financial terms.
Families and businesses that understand whether the next generation is interested in taking over - and are aligned on how that transition might happen - are undoubtedly in the strongest position.
For those who own their farm, the inheritance debate has highlighted the need for planning to begin early. Tailored legal advice is essential, whether that be around issues including Wills or those related to property, business and tax management.
Planning is not just for those for whom the next generation is willing and able to take over the farm business, but also for those reaching the end of the line for their family in agriculture, with the next generation pursuing other careers.
The emotional connection that many farmers have with their land is no secret. One of the reasons that many work beyond “normal” retirement age is that they do not want to leave.
In these circumstances, could it be possible to help a new entrant by renting land or sheds while the farm owner stays in their home? Carefully worded agreements can be win-win for all involved.
But succession is not just an issue for families who own their farms. It’s one for tenant farmers too.
For them, it can be equally as complex as for farm owners - and we are dealing with an increasing number of enquiries around relinquishment and assignation.
Tenants with a “secure” tenancy under the Agricultural Holdings (Scotland) Act 1991, are in possession of a valuable asset. As is widely known, these can be transferred to family members - a factor which is critical to many farming businesses.
For those who do not have a successor, there is also the option of bringing the tenancy to an end. It is the detail of this which is less widely recognised.
The Land Reform (Scotland) Act 2016 introduced the right for secure tenants to both relinquish their tenancy - in return for a payment from their landlord – or, if the landlord does not wish to buy the tenancy, to assign it to someone else, a move designed to give a lift to new entrants into agriculture.
Relinquishment is about financially supporting tenants with leases under the 1991 Act who wish to retire to ensure they can do so by recognising the value of their asset. It is proving a critical pension pot for many.
With assignation, the departing tenant would once again be paid for this. Given the competitiveness of the Scottish land market, that payment may be considerable, particularly as the value at which the tenancy can be sold to new entrants or progressing farmers is not specified in statute.
None of this is easy. Indeed, it is getting more complex. Yet, with careful planning, there is an opportunity to break the age barrier in farming without losing invaluable experience.
