Retiring as a farmer

For most people in the UK, the question of whether you can retire comes down to working out when you can afford to stop working. However, for farming families the question ‘when should I retire?’ poses a unique and often complicated raft of questions.

Firstly, it’s important to ascertain whether the farmer is actually ready to retire from their beloved farming business and, if ‘yes’, who will continue the business? For a sole trader farmer, questions include whether that person can face selling the farming business and, if so, is it in a saleable condition? Further, if lower generations of the family are involved in the business, are they able and willing to take over?

These considerations must be viewed in the context of the farm business itself, eg, is there a partnership agreement and if so, does this deal with the withdrawal of capital? If capital can be removed, is this a viable option for the farmer whilst enabling the business to run and be sold as a going concern?

Then there is the question of the farmhouse. On retirement, will this property still be the farmer’s home? This can have implications upon death, as Agricultural Property Relief (APR) may not be available on the value of the farmhouse if the farmer has ceased farming. This could increase any inheritance tax payable by the estate.

Delaying such decisions can unfortunately raise further problems. For example, lack of mental capacity due to illnesses such as dementia can be catastrophic for a farming business.

For sole traders, bank accounts could become inaccessible, leading to the inability to fulfil contracts, pay staff and ultimately preventing anyone continuing to run the business. Even with a sound partnership agreement in place, a mentally incapacitated partner can cause problems, notwithstanding the impact this can have on the individual farmer and their family’s personal financial position.

Setting up a lasting power of attorney for financial affairs at an early point is important as this allows you to appoint someone to manage your financial affairs if you become unable to do so. In the farming scenario, it’s imperative that you appoint the correct person or people to deal with the business. Having the correct paperwork in place should enable the farm to continue operating largely uninterrupted. Further, if the incapacitated farmer is able to reside in the farmhouse until his death, this can also ensure that the ability to claim Agricultural Property Relief is retained.

All the above adds up to an extremely complicated picture and this is why it is important to seek legal advice from a solicitor.

Ann-Marie Matthews is a solicitor in the private client team at Barker Gotelee, Solicitors in Suffolk.

This article previously appeared in the East Anglian Daily Times, March 2019.

Suffolk LPA Solicitors – for more information on our range of legal services, please call the team on 01473 611211 or email