For those considering taking retirement or capitalising on the buoyant rural property market at present and selling up, the Basic Payment Scheme Lump Sum Exit may be of interest.
The regulations have now been released and approved by Parliament with the Scheme opening for applications from April until 30th September.
Claimants are generally able to claim if they were farming and claiming BPS on the land in 2018. To claim successfully you must sell, gift, or let on a 5 + year Farm Business Tenancy the land that you were claiming by 31st May 2024. The main exceptions to this rule being you can retain up to 5 hectares or any land which has by the 31st May 2024 been planted with trees using a woodland creation scheme or property such as the farmhouse, buildings and woodland.
You must also surrender to DEFRA all the entitlements registered to you and there are more detailed rules for partnerships where individual partners are looking to claim the payment.
The lump sum payment is to be based on the annual average paid to the applicant under the Basic Payment Scheme for the claim years 2019, 2020 and 2021, before the application of reductions or penalties under scheme rules. It should be noted that this is a different reference period to that to be used for de-linking payments, which is to be the three years 2020 to 2022.
That average is assessed across all three years. Where there was a claim for only one or two years, it will still be divided by three. The Specified Reference Amount is capped at £42,500. The Multiplier – The Lump Sum is to be 2.35 times the Specified Reference Amount. That is an assessment of the present value of the remaining Basic Payments that would otherwise be made during the Agricultural Transition Plan between 2022 and 2027.
The payment is to be made within six months of the applicant being notified that the Scheme’s requirements have been met and DEFRA hopes to make the first payments to those who have satisfied the scheme rules in November 2022.
For further information if you are considering letting out, or selling, your agricultural land or farm and wish to understand how the lump sum exit payment may benefit you please call your local Armitstead Barnett office.