JMW conclude multiple grazing agreements for £3 million farmland

JMW’s specialist agricultural litigation team lead by Stephen Topping have successfully worked on short notice instructions to provide several revised grazing agreements concerning a large mixed use estate in North Yorkshire, superseding previous agreements at risk of being considered farm business tenancies, to the disadvantage of JMW’s client.

Background

JMW’s client was engaged in the purchase of a mixed use estate for in excess of £3 million. When the client came to JMW, they were concerned about the status of the existing agreements in place relating to the grazing of livestock on land that formed part of the farm estate, with particular reference to the tax ramifications arising from the nature of land use.

How did JMW help?

JMW partner Stephen Topping reviewed the existing agreements relating to the livestock on the land, advised on the deficiencies in those agreements, the risk that the agreements could give rise to farm business tenancies rather than the licences intended and proposed amendments to the licences. Flowing from the revision of agreements, the true position of the grazing licences would positively reinforce the mixed use nature of the estate, providing the client with significantly reduced exposure to potential tax liabilities.

A properly worded grazing agreement effectively licences permission to a third party to occupy land for grazing purposes without any implied legal entitlements and without exclusive possession; a badly worded agreement runs the risk of being interpreted as a lease, creating legal rights over the land which may not have been the original intention of the parties, with obvious detrimental impact to the freehold owner who is thereby deprived of the use of the land that they own.

Outcome

Stephen was able to work extremely quickly to draft and negotiate revised grazing licence agreements with the people grazing livestock on the land, thereby avoiding any suggestion of exclusive possession of any of the land.

The agreements formalise the existing relationships relating to the land and are valuable documents to all the parties concerned. The work done also provides tax advantages to JMW’s landowner client whilst preserving the integrity of the estate for the benefit of the landowner client.