Archers Home Farm sale raises real issues for real farming families

3 Oct 2018

farm gate

Any fan of the Archers will have been following with interest the progress of Jennifer and Brian Aldridge over the sale of Home Farm, and it may have set some alarm bells ringing for farming listeners who might find themselves in that same situation.

Richard Cartwright, a partner at Saffery Champness and a member of the firm’s Landed Estates Group, says:

“This is a far from uncommon situation in farming circles. For most non-farming families when the older generation are rattling around with too many bedrooms when the grown-up children have flown the coop, it’s simple. Sell up and downsize. But for farming families it may not be that easy. For a start, the farm house will be attached to the business, and there could be tax implications in severing one from the other.

“In the case of Jennifer and Brian Aldridge, if they own the farm outright and it is their main residence, then Principal Private Residence relief (PPR) would cover any gain, but this would not apply to any areas that are used exclusively for the farming business. This would mean, for example, that if the kitchen table is used for meals as well as family farm meetings, then the kitchen would not be disqualified, but where a room has been set aside as a farm office and used exclusively for that purpose then it would not qualify for relief and an apportionment would be made to arrive at a taxable figure.

“Home Farm would appear to have two offices. Brian’s would almost certainly not qualify for PPR, whereas Jennifer’s might if she is using it mostly for general household admin.

“Another issue is likely to concern the sale of any land with the property. Sale of the garden could well qualify for PPR if it meets requirements on size, these being that if the total area including the house exceeds 0.5ha then it must be required for the reasonable enjoyment of the dwelling house, having regard to its size and character. If, on the other hand, the Aldridges intend to sell any of the farmland, then they would need to also consider other business reliefs such as rollover relief.”

Whatever the outcome, the sale of Home Farm is likely to raise a number of questions that are going to require professional advice and Brian and Jennifer would be well advised to start that dialogue before they go much further with the sale process so that no hidden pitfalls come to light at a later date.