Grazing Licence or Farm Business Tenancy? 

Grazing and Mowing Licences are typically short-term agreements that allow a grazier (Licensee) access to another parties land (Licensor), to graze livestock and take crops of grass.  There are no rights of renewal for the agreement, and the licence does not grant exclusive possession of the land to the grazier, meaning the landowner remains ‘in occupation’.  In simple terms, the landowner is selling the grass.  The landowner is liable for all maintenance obligations, including boundaries, drainage and weed management, however remaining in ‘occupation’ can have tax benefits, including qualification for Business Asset Disposal Relief or Roll-Over Relief from Capital Gains Tax and potential Agricultural Property Relief from Inheritance Tax. 

A Farm Business Tenancy (FBT) is an agreement between a landowner (landlord) and occupier (tenant).  This agreement grants exclusive possession of the land or property to the tenant for a given period and is governed under the Agricultural Tenancies Act 1995.  FBT’s are normally utilised where an agreement covers a period of over 12 months or the property being rented includes buildings or dwellings.  A Farm Business Tenancy agreement can cover a full range of matters, including repairing liabilities for each party, the rent and rent review process, rights reserved by the landlord and rights for termination etc. 

FBT’s and Grazing Licences have their own advantages and disadvantages, and careful consideration needs to be given to which is most appropriate in each individual case.

 

Authored by

Simon Wells

Ribble Valley

07889 064859


Read More News

Fir Tree Farm, Aughton, Ormskirk, L39 7HH

8th April 2024 Read >

Utilities and Compensations

2nd April 2024 Read >

Sustainable Farming Incentive

Request a market appraisal

    Fill in your details below and one of our team will be in touch to arrange a suitable time for a market appraisal

    I consent to Armitstead Barnett storing information for processing this form.

    To find out how we store and process your data click here.

     Confirmation of email sent

    Thank You

    Thank you for contacting us, a member of our team will be with you shortly.