Where a farming operation is structured as a partnership, it is important to establish whether the underlying land is partnership property for a number of reasons. These can include whether the land is potentially subject to a legal rights claim on the death of a partner, ascertaining the sums due to the partners on the dissolution of a partnership and also tax reasons, such as whether the land will qualify for 100% business property relief for inheritance tax purposes.
The tenant farming commissioner recently issued guidance on how parties should negotiate the future of limited partnership tenancies. The guidance sets out certain key principles, including that discussions about the future of a limited partnership should take place well in advance of the termination date. Further, all options should be considered in an attempt to meet the wishes of the landlord and the limited and general partners and to support the future sustainable management of the holding.