Lump Sum Exit Scheme Deadline Looming

Farmers considering leaving the industry only have until the end of September to apply for the Lump Sum Exit Scheme.

The scheme, announced by Environment Secretary George Eustice in a February press release, allows farmers to apply for up to £100,000 in return for relinquishing their entitlement to the Basic Payment Scheme and transferring their land.

If you’re thinking of applying, you need to meet the following criteria:

• You must be an individual farmer or own 50% or more of a limited company or partnership.
• You have been claiming Basic Payment Entitlements since 2018 or earlier.
• You must transfer your land by selling it, gifting it, renting it out or surrendering your tenancy. This point is significant and integral to a succession plan as under the scheme; a tenant is allowed to assign the tenancy to a successor under the Agricultural Holdings Act.
• Complete the land transfer by 31st May 2024.

The amount of money you can apply for will be the average of your 2019-2021 Basic Payment Scheme receipts multiplied by 2.35 and is capped at £100,000.

If you own non-agricultural land and property (both residential and commercial), you can retain it under the scheme, along with up to 5ha of agricultural land.

You need to be aware that the payment you receive will be subject to capital gains tax or corporation tax, so seeking professional advice before applying is something we would recommend.

If you’d like to know more about the Lump Sum Exit Scheme, succession planning or any other rural business issue, please call us on 01522 696 496, email ray@walters-rural.com or fill in our contact form.